Egypt crisis pushes dollar higher


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

The euro edged down $1.3570 in early Asian trade, from $1.3601 late Thursday in New York, while the greenback as up at 83.37 yen from 83.20 yen.

The euro fetched 113.14 yen against 113.18 yen late Thursday.

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

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

Philip Wee, senior currency economist for DBS Group Research in Singapore, said the greenback derived its strength from the crisis in Egypt.

Hundreds of thousands of protesters took to the streets of Cairo on Thursday after President Hosni Mubarak said in a televised announcement that he would not step aside, enraging those who thought he would do otherwise.

“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.

The decisions to keep rates on hold by the Band of Korea and Bank of England, which are both battling to keep inflation under control, gave a lift to the greenback as traders move out of their currencies to look for safer and better returns.

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

The State Bank of Vietnam said the country’s unit was not at 2,0693 to the dollar, compared with 18,932 previously.

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