Egypt crisis pushes dollar higher

February 11, 2011
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, SINGAPORE, Feb 11, 2011 – The greenback strengthened Friday as tensions in Egypt led traders to seek safer assets, while decisions by Britain and South Korea to leave interest rates on hold also provided support.

The euro edged down to $1.3559 in afternoon Asian trade, from $1.3601 late Thursday in New York, while the greenback was up at 83.51 yen from 83.20 yen.

The euro fetched 113.23 yen against 113.18 late Thursday.

Trading was quiet with the Japanese financial markets closed for a holiday.

The greenback has benefited generally from an upturn in sentiment towards the US economy, with data pointing to a strong rebound.

In addition, Philip Wee, senior currency economist for DBS Group Research in Singapore, said the greenback\’s latest rise was due to Egypt\’s crisis.

Hundreds of thousands of protesters took to Cairo\’s streets on Thursday after President Hosni Mubarak said in a televised announcement that he would not step aside, and a further major demonstration was expected on Friday.

"The Egypt situation is the risk-averse news of the last few hours. There\’s no question about that," Westpac Bank strategist Imre Speizer said, according to Dow Jones Newswires.

Decisions to keep rates on hold by the Band of Korea and Bank of England, which are both battling inflation, gave a lift to the greenback as traders moved out of the two countries\’ currencies seeking safer and better returns.

In Vietnam the central bank announced the fourth devaluation of the dong in 15 months as the country struggles against inflation, which hit more than 12 percent year-on-year in January.

The State Bank of Vietnam said the country\’s unit was now at 20,693 to the dollar, compared with 18,932 previously.

The US dollar was higher against major Asian currencies on Friday, rising to Sg $1.2832 from Sg$1.2757 on Thursday, 1,127.36 Korean won from 1,114.90 and 8,925.00 Indonesian rupiah from 8,920.00.

It bought Tw$29.17 from Tw$28.87, 43.83 Philippine pesos from 43.66 and 30.87 Thai baht from 30.67.

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