By: Barbara Zigah
The U.S. Dollar saw broad gains in Asian trading today as geopolitical tensions in the Middle East ratcheted up a notch, and investors shun high risk currencies in favor of the safe haven greenback. The U.S. Dollar Index, a gauge of the greenback’s strength versus major currencies, rose .5% to trade at 78.107 .DXY. In cross trades, the U.S. Dollar rose .4% against the Pound Sterling, trading at $1.6160. Against the Euro, the gain was a significant .7%, trading at $1.3584.
The greenback also rose against the Japanese Yen, trading at 82.29 Yen, a rise of .2%. The U.S. Dollar saw its sharpest gains against the New Zealand Dollar, up 1.5% to $0.7523, following a strong earthquake which struck one of New Zealand’s major cities and resulted in multiple deaths and severe devestation.
The escalation of tension in Libya is especially spooking investors; resulting in surging oil prices and weighing heavily on Asian equity prices and currencies. Some analysts suggest that today’s currency declines are only a knee-jerk reaction; however they expect the pressure on some major currencies, especially the Pound Sterling and the common currency Euro, to be more enduring, most especially should oil prices remain high as a result.