The dollar rose the most since August against six major counterparts as the concern that Europe's problem of the debt will get worse and military action in Korea spurred increased demand for U.S. currency as a refuge.
The dollar rose against the yen for the fourth consecutive week, the longest streak in 20 months after North Korea bombed a South Korean island and said that "the confrontation escalated" will lead to war. The euro fell for a third week against the dollar as investors speculated Portugal and Spain are the countries of Europe together with the need for a bailout. U.S. added jobs in November for the second consecutive month, data from next week may show.
"The euro has continued to fall against the dollar," said Kathy Lien, director of research at online currency trader GFT Forex in New York. "If there is a war between the two Koreas, the yen would fall against the dollar aggressively."
The dollar index rose for a third week, gaining 2.4 percent, the most since the five days ended August 13 at 80,382. IntercontinentalExchange Inc. uses the indicator to follow the U.S. currency against the euro, yen, pound, Canadian dollar, Swiss franc and Swedish krona. Reached 80,522 yesterday, the highest since Sept. 21.
The euro fell 3.2 percent to $ 1.3242 from $ 1.3673 on Nov. 19. The decline in three weeks was the longest since May. The 16 - nation currency has lost 5.1 percent this month. It fell 2.5 percent against the yen to 111.37 from 114.23 weeks ago.
Longest in 20 months
The dollar rose 0.7 percent against the yen to 84.10 from 83.55 yen. It was the fourth weekly gain, the longest streak since the six weeks ended March 6, 2009.
the common European currency fell against 14 of its 16 major counterparts as bonds most indebted countries in the region was reduced after Ireland agreed to become the second nation to seek a bailout, after Greece. The Financial Times Deutschland reported responsible for the euro area, the policy of Portugal were pushing to do the same to protect Spain from infection.
The extra yield investors demand to hold Irish 10-year bonds rather than their German counterparts a small percentage rose to record euro was 6.56, while the spread of the debt to 10 years in Portugal on German bonds touched 4.55 percentage points. The spread of Spanish-German 10 years rose to 2.64 percentage points. That's the highest since the introduction of the euro in 1999.
Finance Minister of Spain, Elena Salgado, said there "absolutely" no risk that his country needs a rescue.
Court Classification
Ratings Standard & Poor's downgraded the long-term sovereign credit rating two steps to Ireland A from AA-. Irish officials hurried to complete a grant agreement to open the package before financial markets next week.
"The history of Europe will continue, and will not be able to stop the contagion to other countries," said Blake Jespersen, director of foreign exchange in Toronto at the Bank of Montreal. "All Asian currencies are suffering from tensions in Korea. Those two things are really causing the market to take a break."
The yen was on the verge of a monthly loss of 4.4 percent against the dollar, the weakening of the top 15 who arrived in October as the U.S. sent the aircraft carrier USS George Washington to participate in naval exercises off the coast of Korea.
"If there is an escalation in tensions in Korea, then that certainly is detrimental to the already struggling economy-Japan," said Omer Eisner, chief market analyst in Washington at the Commonwealth Foreign Exchange Inc., a firm currency brokerage. "Proximity to the crisis could be something that is keeping investors wary of the Japanese yen."
Won plunges
The South Korean won fell more than five months as North Korea said the naval exercises, naval exercises Peninsula moved "closer to the brink of war." The artillery attack from North Korea on November 23, killing four people.
The won fell 2.2 percent, the most since the five days ended June 11 at 1159.63 per dollar.
Canadian dollar gained against 15 of its 16 most-traded counterparts of the week, even as it lost 0.4 percent to C $ 1.0213 to the dollar in European terms and Korea damped investor appetite for risk. It strengthened 1.5 percent, the biggest one-day gain in almost three months, on 24 November as Russia said it began to add the currency reserves.
"So far, the amounts are very small, but there is no such possibility to increase our positions," said Alexei Ulyukayev, first deputy chairman of Russia's central bank said in an interview in Moscow.
The Australian dollar, known as the Australian, hit the lowest level in seven weeks against the dollar after the Reserve Bank governor Glenn Stevens said the national rate of interest is appropriate for the "period ahead." It fell 2.2 percent to 96.45 U.S. cents from 98.66 on November 19, and touched 96.13.
New Zealand dollar was the worst performer among major currencies. It fell 3.7 percent, the most since the five days ended Aug. 13, at 74.99 U.S. cents through reduction in risk appetite.
The U.S. economy added 145,000 jobs in November after a rise of 151,000 in October, according to the median forecast of economists polled by our reports before the Labor Department has data on 3 December.
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