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The Swiss franc rose against all of its 16 most-traded counterparts as violence in Libya boosted demand for the currency as a refuge.
The euro pared its drop versus the dollar after Yves Mersch, a European Central Bank council member, said the ECB may toughen its stance on inflation as soon as next week.
“I would not be surprised at most colleagues concluding that we have upside risks to price stability,” Mersch said in an interview in Luxembourg yesterday. With the economy strengthening and inflation in breach of the ECB’s 2 percent limit, policy makers will “inevitably” have to “rebalance our monetary policy stance,” he said, without giving a time frame.
The Frankfurt-based ECB is scheduled to hold its next policy meeting on March 3.
“The governing council is turning more focus on inflation,” said David Watt, senior currency strategist at Royal Bank of Canada’s RBC Capital Markets unit in Toronto. “It’s a gentle reminder that there are hawkish elements on the ECB.”
Oil climbed on concern turmoil in North Africa and the Mideast will disrupt supplies. Crude oil for April delivery gained as much as 2.7% to $108.57 a barrel in London, the highest since September 2008.
Stocks fell, with the Standard & Poor’s 500 Index dropping 1.5% and the MSCI World Index losing 1.1%.
The dollar briefly gained versus the euro after the S&P/Case-Shiller index of home values in 20 U.S. cities fell 2.4% in December, the biggest year-over-year decrease since December 2009, according to figures from the group. The median forecast of economists was for a 2.3% drop.
The Conference Board’s index of sentiment increased to 70.4, the highest since February 2008, from 64.8 the prior month, figures from the private research group showed today.
New Zealand’s dollar slumped after an earthquake struck the nation’s second-largest city, killing at least 65, while the yen gained versus the greenback as U.S. Treasury yields fell to almost three-week lows.
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