French stocks edged lower on Friday as an escalation of the tensions in the Middle East and cautious comments from more Federal Reserve officials on how to manage inflation and interest rates in the coming months soured investor mood.

UK retail sales were unchanged on a month-on-month basis in March, defying expectations for a gain, preliminary data from the Office for National Statistics showed Friday. Retail sales including automotive fuel grew 0.1 percent in the previous month. Economists were looking for a 0.3 percent gain for March.

German stocks traded notably lower on Friday as investors reacted to hawkish comments from Federal Reserve officials and signs of escalating tensions in the Middle East, with Iran downplaying Israel's retaliatory attack.

Asian stocks sank on Friday while the dollar surged, oil prices climbed and gold held near a record high below $2,400 per ounce after Israel launched strikes against Iran, in what appeared to be limited retaliatory action for last week's drone and missile barrage by Tehran.

Antipodean currencies such as Australia, the New Zealand and the Canadian dollars weakened against other major currencies in the Asian session on Friday, as Asian stock markets traded lower amid ongoing concerns over the tensions in the middle-east with reports of Israel retaliating to last weekend's attacks.

The market was roiled by unconfirmed reports of explosions in Iran, Iraq, and Syria, adding to the already tense atmosphere following Iran's recent attack on Israel over the weekend. Anticipation of potential retaliation from Israel contributed to heightened nervousness in the markets throughout the week.

Investors are keeping a close eye on gold as the conflict in the Middle East escalates with a possibility of a full-scale regional war in the area.

Euro Dollar up 0.4%, Dollar Yen down 0.2%, Gold Dollar drops 0.8%. Nike gains 0.2%. Dollar strong, impacting Yen. US stocks volatile on Fed concerns, Europe steady. Key events: US jobless claims, Australia employment, Eurozone meeting, Japan industry index, Australia unemployment rate.

The British pound sterling is showing signs of recovery, bouncing back from a five-month low, with GBP/USD stabilising around the 1.2470 mark on Thursday.

Euro edges higher despite continued hawkish commentary from Fed officials; Geopolitical developments cast doubt on ECB June rate cut; Yen fails to make considerable gains as market looks to Friday’s CPI data