Dollar firms as investors seek haven after Paris attacks
[NEW YORK] The US dollar firmed against the euro on Monday as investors sought the safety of the US currency after the Paris terror attacks renewed concerns about the struggling eurozone economy.
In the first day of trading since suspected jihadists launched attacks against civilian targets in Paris late Friday, killing 129 people and wounding more than 350, the euro neared a seven-month low against the greenback.
"Safe havens like the US dollar were in demand Monday as the attacks on Paris added a new layer of uncertainty for markets," said Joe Manimbo, senior market analyst at Western Union Business Solutions.
Investors proved their mettle in the face of the attacks, however, with currencies showing no unusually large moves, said Kathy Lien of BK Asset Management.
"Just like people, financial markets typically face down terrorism with resilience," she said.
The euro traded at US$1.0687 around 2200 GMT, down from US$1.0687 at the same time Friday.
The yen was under pressure after data showed the Japanese economy slipped back into recession for the second time in as many years, raising speculation that the Bank of Japan will boost its stimulus programme.
The dollar rose to 123.18 yen from 122.62 yen Friday.
"The biggest question on everyone's minds now is whether the attacks will cause the Federal Reserve to back away from raising interest rates next month," said Ms Lien.
"Considering that the market's reaction has been muted and the eurozone economy was facing troubles before the attacks, it is too soon to say whether international developments will encourage the (US) central bank to wait."
AFP
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