By Vikram Subhedar
LONDON, April 7 (Reuters) - Oil prices held near one-month highs on Friday after the United States attacked a Syrian air base but stocks and the dollar recovered early falls when a U.S. official played down the risks of an escalation.
The U.S. dollar recouped all of its losses against a basket of major currencies .DXY and was last trading little changed. S&P 500 futures ESc1 were down 0.1 percent.
European stocks .STOXX fell 0.3 percent weighed down by weakness in mining stocks as investors locked in some profits following the sector's stellar run this year.
The United States fired dozens of cruise missiles at a Syrian air base from which it said a chemical weapons attack was launched this week, an escalation of the U.S. military role in Syria that swiftly drew sharp criticism from Russia. U.S. defence official told Reuters the missile strike was a "one-off", helping to calm market nerves. U.S. missile strike on a Syrian air base overnight caused a knee-jerk shift into safe havens, although the impact was moderate as it is being interpreted as a one-off proportionate response," said Ian Williams, a strategist at Peel Hunt in London.
Oil prices hovered near one-month highs though prices pared some gains as there seemed no immediate threat to supplies.
Brent crude futures LCOc1 which surged more than 2 percent after the U.S. attack were last up 1.5 percent at $55.72 a barrel. U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 1.6 percent.
Focus was also shifting to U.S. payrolls later in the day for further cues on the strength of the economy. Job growth likely slowed in March after unseasonably mild weather boosted hiring over the prior two months.
Elsewhere, euro zone finance ministers are due to meet with a discussion on Greece's progress in implementing reforms needed to unlock aid part of the agenda.
Nonfarm payrolls probably increased by 180,000 jobs last month, according to a Reuters survey of economists. had already been on edge with talks poised to begin between Donald Trump and Chinese leader Xi Jinping over flashpoints such as North Korea and China's huge trade surplus with the United States.
Spot gold XAU= was up a percent while high-rated euro zone government bonds edged lower.
The yield on Germany's 10-year government bonds DE10YT=TWEB fell to a one-month low. Overnight, U.S. Treasury yields dropped to their lowest level in over four months at 2.29 percent US10YT=RR
"Safe-haven flows are always affected by political events, and when it affects countries where the U.S. and Russia are interested, then investors become even more nervous because of relations (between those two)," said DZ Bank strategist Daniel Lenz.
"Especially now you also have talks between the U.S. and China on North Korea," he added.
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: http://tmsnrt.rs/2l02TCA Graphic on cruise missiles
http://tmsnrt.rs/2ofLwzQ Chart of cumulated reported deaths from chemical gases in Syria:
http://tmsnrt.rs/2nHibug
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