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Politics : Liberalism: Do You Agree We've Had Enough of It? -- Ignore unavailable to you. Want to Upgrade?

To: TideGlider who wrote (100206)	2/24/2011 5:48:20 PM
From: FJB	1 Recommendation Respond to of 224718

Swiss franc touches record peak against dollar By Neil Dennis and Peter Garnham in London ft.com Published: February 24 2011 16:49 \| Last updated: February 24 2011 16:49 Increasing demand for havens drove the Swiss franc to a record high against the US currency on Thursday, as crude oil prices surged in the wake of the latest wave of violence to strike north African oil producer Libya. Meanwhile, the yen returned to levels at which Japanese authorities become uneasy and speculation about Bank of Japan intervention added to volatility on foreign exchanges. As global equity markets resumed their sell-off on Thursday, with many extending their losses into a fourth consecutive session, investors sought safety, damaging the currencies of emerging markets and boosting the franc and yen. Other so-called “safe havens”, such as gold and US Treasuries, have also outperformed riskier asset classes as investors worry about the possibility of high oil prices slowing the pace of economic recovery. “The traditional safe haven currencies of the yen and the Swiss franc are currently outperforming as fears build that escalating social and political tensions in Africa and the Middle East will lead to a significant supply-driven oil price shock dealing a sizeable negative blow to global growth,” said Lee Hardman at Bank of Tokyo Mitsubishi UFJ. Lee McDarby at Investec Bank considered the inflationary impact of surging crude prices. He said: “Brent crude oil has hit a 2½-year high and the inflationary pressures that this will exert are beginning to have a telling effect on risk appetite as equities continue to grind lower and the likes of the Swiss franc and the Japanese yen rise.” The Swiss franc last peaked against the dollar and the euro in late December when the market’s predominant concern was eurozone sovereign debt. Although the euro has since recovered some ground, on Thursday the Swissie climbed to a new record versus the dollar. The US currency fell to a low of SFr0.9238 and in late trade was 0.8 per cent lower at SFr0.9256. The rise in the Swiss franc and the yen came amid growing signals that the dollar was losing its traditional appeal as a haven currency. Indeed, as tensions in the Middle East have escalated in the past two weeks, the dollar has fallen 5 per cent against the Swiss franc and 2.1 per against the yen, while dropping 2 per cent against the euro and 1.3 per cent against sterling. Marc Chandler at Brown Brothers Harriman said the dollar’s historic position of safety has been undermined by falling US Treasury yields. “The market remains risk averse but yield sensitive, so the dollar is unlikely to receive much support,” he said. “That means the yen and the Swiss franc are likely to remain the safe currencies of choice.”