Euro rises in Asia trade on Gaza attacks

Euro rises in Asia trade on Gaza attacks

Tokyo: The euro strengthened in Asian trade on Monday on concerns that renewed conflict in the Middle East might push up oil prices, dealing a further blow to the US economy, dealers said.

Israeli warplanes on Saturday unleashed an offensive on the Gaza Strip, killing more than 300 people, in a bid to stop Palestinian militants from firing rockets.

The US dollar often faces selling pressure against the euro during conflicts in the Middle East by highlighting Washington’s heavy reliance on the volatile region’s oil.

The euro bought 1.4193 dollars, compared with 1.4025 dollars in New York on Friday, while rising to 128.36 yen from 127.30.

“The developments in the Middle East are likely to keep fuelling the euro at least for a day or two," Yuji Saito, head of foreign exchange at Societe Generale, told Dow Jones Newswires.

The European single currency meanwhile rose to an all-time high against sterling at 0.9664pounds.

“The euro will probably touch parity with the sterling in two weeks," Saito said.

Sterling has fallen over the past month on expectations that the Bank of England will cut interest rates after gloomy economic data from Britain.

Dealers said the market could see limited movement until President-elect Barack Obama is inaugurated on 20 January amid hopes that his administration will give a boost to the troubled US economy.

The dollar was mostly lower in regional Asian trade.

It fell to 1,268.90 South Korean won from 1,288.90 on Friday, to 11,100 Indonesian rupiah from 11,150 and to 47.40 Philippine pesos from 47.54.

The greenback declined to 1.4422 Singapore dollars from 1.4434 and to 32.99 Taiwan dollars from 33.00 but rose to 35.06 Thai baht from to 34.96.