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FOREX -Syria tensions buoy yen, Swiss franc while riskier currencies fall
August 27, 2013 / 10:24 AM / 4 years ago

FOREX -Syria tensions buoy yen, Swiss franc while riskier currencies fall

* Yen sharply higher vs Australian and New Zealand dollars
    * Swiss also franc rises versus euro, dollar
    * Emerging market currencies in rout on Syria tension
    * German IFO survey has little impact on euro/dollar


    By Anirban Nag
    LONDON, Aug 27 (Reuters) - The safe-haven yen and Swiss
franc gained on Tuesday and riskier currencies like the
Australian dollar fell as geopolitical tensions rose with the
West appearing to edge towards military action against the
Syrian government.
    The dollar extended losses to fall 0.8 percent versus the
yen to 97.70 yen, pulling away from a near three-week
high of 99.15 yen set on Friday on EBS. 
    The dollar fell 0.2 percent against Swiss franc to
0.9215 francs, while the euro was down 0.4 percent at 1.2296
francs.
    German, U.S. and British government bond prices all rose as
money flowed in to safe-haven markets. On the other hand, stocks
 were lower as were emerging market assets.
    "We are seeing some safe-haven bids because of the Syrian
issue and that is driving the Aussie and the kiwi lower," said
Daragh Maher, currency strategist at HSBC.
    The growth-linked Australian dollar was down 0.9
percent at $0.8950 while against the yen it lost 1.7 percent to
87.45 yen. The New Zealand dollar fell 1.6 percent
against the yen to 76.05 yen   
    Washington said on Monday it believed Syrian President
Bashar al-Assad was responsible for a chemical weapons attack on
civilians last week in what U.S. Secretary of State John Kerry
called a "moral obscenity." 
    The Swiss franc and the yen usually climb in times of
financial market stress and economic uncertainty while
growth-linked higher-yielding currencies are sold off.
    Emerging market currencies tumbled, with the Indian rupee
hitting a record low and the Russian rouble, the Indonesian
rupiah and a host of others recording multi-year troughs.
    The rising tension stemming from Syria overshadowed the
impact from positive data from the euro zone on the euro.
    The IFO German confidence survey showed business sentiment
was at its highest level in 16 months but that had only a
fleeting impact on the euro. 
    "IFO beat expectations with both the current assessment and
forward-looking expectations better than expected," said Elsa
Lignos, senior currency strategist at RBC Capital." The effect
was lost in the general safe haven rally, taking euro/dollar
down to a low of $1.3322."
    The euro was last down 0.2 against the dollar at
$1.3340 while it was down 1 percent against the yen at
130.31 yen. Its losses against the yen were mainly due to
worries about Syria, traders said.
    Data due later from the United States includes the
Case-Shiller house price index, consumer confidence and the
Richmond Fed survey. 
    Disappointing U.S. data in the past two trading sessions,
including one which highlighted the fragility of the housing
sector, have weighed on the dollar, although buying at
lower levels has checked sharp losses.

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