By: Barbara Zigah
High risk currencies fell broadly in Asian trading today on investors concern that growing unrest in Tunisia and Egypt could trigger further violence in the Middle East. As reported at 2:32 pm. (JST) in Tokyo, the common currency Euro fell against the U.S. Dollar, trading at one point to a low of $1.3570 on the EBS trading platform, but later trimming losses and holding at 1.3602, a loss of .1% from Friday’s late U.S. trade. The Euro also lost ground against the Japanese Yen, falling to 111.59 Yen, a decline o .2%. Similarly, the Australian Dollar slipped against the greenback, falling .2% to trade below parity at $0.9919, rebounding slightly from an earlier low of $0.9866.
One forex strategist in Japan commented that emerging and high-risk currencies would be under pressure in the near term. According to the strategist, considering that the civil unrest is being flamed by inflationary pressures, which is felt most strongly by the masses in developing countries, stability in other emerging economies, notably China and India, may be cause for concern.
Gaining support from the Middle East crisis are the perceived “safe haven” currencies, such as the U.S. Dollar, the Japanese Yen and the Swiss Franc. Investors will likely attempt to close their higher risk positions, which is accounting for the rise in Euro sales.