Dollar Climbs to Seven-Week High

The dollar rose to a seven-week low against the yen as concern the conflict between North and South Korea will increase boosted demand for the safety of the U.S. currency.

The dollar rose for a third day against the yen as an agency of North Korea's state media said planned naval exercises in South Korea and the U.S. moved from the peninsula closer to the brink of war. " Dollar Index headed for its third weekly gain, the longest winning streak since May. The Korean won weakened further day by day in five months. The euro fell to a two-month low against the dollar amid concerns of Europe's sovereign debt loads are getting worse.

"The North Korean statement is added to the tensions and leading to the safe-haven demand for the dollar," said Simon Derrick, currency strategist at Bank of New York Mellon Corp. in London. "It's very much a day-off risk. If investor confidence continues to crumble, the euro could be between $ 1.27 and $ 1.30 for the end of the year."

The dollar rose to 83.83 yen from 83.60 yen after 7:01 am in New York, after earlier touching 83.97 yen, the strongest since Oct. 5. The U.S. currency reached $ 1.5686 per pound, the strongest since Oct. 25. The dollar edged up to 1.0040 francs, the strongest level since Sept. 21, before trading at 1.0026 to 1.0006.

The dollar index, which tracks the greenback against the currencies of six major U.S. trading partners, rose to as many as 80,485, the highest since Sept. 21.

Forint Drops

The Hungarian forint fell as plans to funnel the assets of private pension funds to the trust between investors and States eroded.

Hungary, the first European Union country to receive an International Monetary Fund's bailout plan for the credit crisis two years ago, plans to change three trillion forint ($ 14 billion) of assets of private funds pensions in the state budget to help reduce its deficit and public debt.

The forint slid to 3.6 percent against the euro, the eldest of nine weeks, and negotiated a 1 percent weaker at 280.313 per euro.

The euro fell 0.9 percent to $ 1.3238, after reaching $ 1.3201, the lowest since Sept. 21. The single currency has fallen 3.2 percent this week. It sank 0.6 percent to 110.99 yen from 111.69 yen.

The 16-nation single currency has dropped 2.5 percent last month to an extent of 10 pairs of developed countries, currency indexes weighted Correlation-show. The dollar is up 2.8 percent, while the yen has fallen 0.5 percent.

U.S. Carrier

The euro has created a weekly loss against 15 of its 16 partners over after the Financial Times Deutschland reported that those responsible for the euro area policy are pushing to Portugal to seek help from a rescue fund of 750 billion euros.

President Barack Obama has sent the USS George Washington to participate in military exercises scheduled for November 28 to December 1 in the Yellow Sea, off the west coast of the Korean peninsula.

U.S. sent the aircraft carrier in a show of strength after North Korea this week bombed a South Korean island. North Korea warned that any "confrontation escalated" will lead to war, KCNA, said in an emailed statement.

"It seems that there are tensions between the two Koreas, Japan and geographically close to them," said Masanobu Ishikawa, general manager of foreign exchange in Tokyo Forex and Ueda Harlow Ltd. "This may be the cause of some buying of the dollar and selling the yen. "

The pressure on Portugal

South Korean won fell 1.9 percent to 1,159.63 per dollar, the biggest daily drop since June 25. Front won fell to 1.9 percent, with the contract delivery month without 1,166.25 per dollar to weaken. The contract reached 1179.10 per dollar on 23 November, the lowest since Sept. 9.

By putting pressure on the Portuguese government, the European Central Bank and the countries monetary union in order to avoid a bailout of Spain, Financial Times Deutschland said. The newspaper sent an e-mail preview of a report published in today's edition citing unidentified people within the Ministry of Finance of Germany.

Portugal faces a final vote in parliament today on its 2011 spending plan that includes measures to cut its deficit.

The financial costs of the most indebted countries in the euro region are emerging as a capitulation of Ireland in the acceptance of a plan to rescue its banking sector fuels speculation that other countries also seek assistance. The average yield investors demand to hold debt to 10 years in Greece, Ireland, Portugal, Spain and Italy came to 7.52 percent yesterday, a record of the euro era.

"Finance trembling '

"The debt crisis in Europe also has to run," said Joseph Capurso, a currency strategist at Commonwealth Bank of Australia in Sydney. "Portugal and Spain have unstable government finances, so their bond markets may go through a period of massive sale. In this environment, you can expect the euro to sell even more."

Irish Finance Minister Brian Lenihan said yesterday that while the size of a rescue of the European Union and the International Monetary Fund has not yet been determined, an amount of about 85 million euros "mentioned." The government said this week that will reduce spending by 20 percent and raise taxes in the next four years.

German Finance Minister, Wolfgang Schaeuble, said he hoped that talks between the Irish government, the European Central Bank, the European Commission and the IMF on aid for the most indebted country will be held next week.

Esparza Ireland

"I hope we will have the necessary decisions in Europe in place early next week to calm returns to markets and speculation ends completely exaggerated," said Schaeuble, in a radio interview with Bayern2.

"The budget and rescue Irish have not calmed the nerves of the market and the market has now turned his attention to Portugal," said David Forrester, currency economist at Barclays Capital in Singapore. The gains in bond yields in the euro area in relation to German bonds to put "downward pressure on the euro."

The extra yield investors demand to hold Irish 10-year bonds rather than their German counterparts went to a small percentage record was 6.55 euro today, while the spread of the debt to 10 years in Portugal on bonds Germans rose to 4.45 points. The spread of Spanish-German 10 years reached 2.64 percentage points, according to generic. That's the highest since the introduction of the euro in 1999.

A report today showed consumer spending in France fell 0.7 percent in October from September, when it rose a revised 1.6 percent. Economists polled by  News had expected a decline of 0.5 percent. Europe's recovery will remain "provisional" for the next two years, with a risk of a setback if the crisis in the region of the debt is not resolved, a group of European research institutes said today.

Aussie weakens

Australia dollar weakened for a second day after Reserve Bank governor Glenn Stevens said his country's prospects adjustment of interest rates is appropriate for the early increases damping.

Stevens statement suggests "RBA is quite comfortable with the current level of policy and is unlikely to change," said Greg Gibbs, senior currency strategist at Royal Bank of Scotland Group Plc in Sydney. "The market has no price rise fully until July next year."

The Australian dollar fell 1.8 percent to 96.31 U.S. cents, and slid 1.5 percent to 80.80 yen.