LONDON (Reuters) - The US dollar hit its lowest in three years versus the euro and four years on the Swiss franc on Friday as concern about a war against Iraq and fears about North Korea's nuclear plans drove funds out of the greenback.
North Korea was also reported as saying it would expel U.N. nuclear inspectors monitoring a reactor capable of producing plutonium for nuclear weapons, but the U.N. nuclear watchdog said its staff in the state had received no notice.
Tensions over Iraq continue, with Iraq saying on Thursday it had boosted food rations to let citizens stock up before a possible war with the United States and accusing U.S. and British planes of bombing civilian targets, including a mosque.
"People are once again focused on the U.S. current account deficit. In an environment with concerns about war and world growth, people want to keep their money at home and that will penalize currencies with a large current account deficit," said Julian Jessop, chief European economist at Standard Chartered.
"The mood for the dollar is very negative and it's the clearest theme for the first quarter next year."
By 1245 GMT the euro had risen as high as $1.0397, its strongest showing since January 2000. The safe-haven Swiss franc hit a four-year high of 1.3987 per dollar.
The greenback hit its lowest levels in almost three years against an index of currencies, and was hovering just above its various lows in the European session.
In a separate development, the Itar-Tass news agency reported at least 25 people were killed in a blast on Friday at the government headquarters in Grozny, capital of the rebellious Russian province of Chechnya.
The dollar was traditionally seen as a safe haven in times of war, but attacks on U.S. soil on September 11, 2001 and the huge U.S. trade deficit have removed the U.S. currency's safe haven appeal, analysts said.
Brent crude futures hit their highest levels since September 11, 2001 and gold was close to six-year peaks. U.S. stock index futures were pointing to a lower open on Wall Street.
The dollar also hit five-year lows against the high-yielding Norwegian crown at 7.0000.
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We in the US are facing a paradigm shift, as we have become the prey.... |
