The dollar index DXY which measures the US dollar movement against its major counterpart rivals surged to 78.806 in overnight trading session as compared to 78.611 on Monday’s late trading session.
Traders and investors turned their focus towards the greenback and Swiss franc on the news of the artillery fire exchanged between South Korea and North Korea. Further the Euro remained under pressure on Ireland’s debt situation.
According to the latest update North Korea’s artillery fired rockets at South Korean border on a disputed territory which killed two South Korean marines and destroyed several buildings. South Korean military also responded with heavy fires according to the Wall Street Journal.
Currency strategist Peter Frank from Societe Generale commented, “Given the fast moving pace of events in the Korean, further sharp gains in the U.S. dollar, and possibly gold and oil prices remain a key risk if the military crisis escalates further.”
The Euro dropped to $1.3554 against the US dollar the as compared to $1.3620 on Friday. The US dollar also surged against the Japanese Yen to 83.41 as compared to 83.26 on Monday.
The US dollar also gained 0.1% against the Swiss Franc to 0.9881. On the other hand Euro declined 0.4% to 1.3398 against the Swiss Franc.
The Pound Sterling also declined 0.1% to 1.5938 against the greenback however surged 0.3% to 85.06 versus the Euro.
Euro is expected to remain under pressure in future trading sessions as Ireland’s Prime Minister Brian Cowen is trying his best to support the government’s budget for 2011. The prime minister has no plans for resignation and intends to start elections once the budget gets approved.
