The Swiss franc and the yen advanced against a majority of their most-traded counterparts on speculation unrest spreading through North Africa and the Middle East will derail a global economic recovery. The euro fell for a third day versus the franc on concern a new Irish government will seek to share the burden of rescuing the nation’s financial system with senior bank bondholders. The dollar touched a three-week low against the yen on prospects Federal Reserve Chairman Ben S. Bernanke will signal this week that interest rates will stay near zero. “There’s still some spreading of political unrest in the Middle East, with Oman starting to get involved as well,” said Darryl Conroy, financial markets analyst at Suncorp-Metway Ltd. in Brisbane. “The yen and the franc are likely to be supported in this uncertain environment.” The franc rose to 92.63 centimes per dollar at 2:54 p.m. in Tokyo from 92.82 on Feb. 25, when it touched 92.28, the strongest since at least 1971, when Bloomberg records began. The franc has risen 1.9 percent versus the dollar since Jan. 31, headed for a monthly gain versus 12 of its 16 major peers. The yen was at 81.64 per dollar from 81.68 yen, after trading as strong as 81.62, the highest level since Feb. 4. The euro fell to 1.2751 francs from 1.2768 francs on Feb. 25. It touched 1.2706 francs on Feb. 24, the least since Jan. 13. The single currency was at 112.38 yen from 112.35 yen, after earlier touching 111.96 yen, the lowest since Feb. 8. The euro fetched $1.3766 from $1.3754. Middle East The unrest that swept the Middle East in the past month, ousting President Zine El Abidine Ben Ali from Tunisia and Egyptian leader Hosni Mubarak, spread to Oman, where protesters clashed with security forces in the province of Sohar yesterday. In Libya, Muammar Qaddafi, in power since 1969, is facing a rebellion that has taken over the eastern part of the nation. U.S. officials will meet foreign counterparts in Geneva today to discuss Libya, including measures to pressure Qaddafi out of power while building ties to opposition leaders. U.S. Secretary of State Hillary Clinton said for the first time yesterday that the U.S. has begun “reaching out” to Libyans organizing for a post-Qaddafi era. The Swiss and Japanese currencies tend to strengthen in times of political unrest because their export-reliant economies don’t need foreign capital to balance current accounts, which are the broadest measure of trade. Political Shift The euro approached a six-week low against the franc after Enda Kenny said he’ll push for the quick formation of Ireland’s next government and the re-negotiation of an international bailout after a Feb. 25 general election left his Fine Gael party in a position to form a coalition administration. “Ireland’s election outcome suggests there may be renegotiations over the bailout, which are unlikely to go well,” said Yuji Saito, director of the foreign-exchange department at Credit Agricole Corporate and Investment Bank in Tokyo. “It’s negative for the euro.” The leader of Fine Gael that won the most seats in the ballot said on broadcaster RTE that he’ll start the process of reopening the terms of the bailout from the European Union and the International Monetary Fund last year. He’s seeking to lower the 5.8 percent interest rate on the bailout loans and end the protection of senior bank bondholders. The result follows a defeat earlier this month for Angela Merkel’s party in the first of seven state elections which threaten to limit her scope to tackle the region’s debt crisis. China’s Growth “We’ve got a political shift in Ireland and Germany and a banking system that’s hooked on European Central Bank cash,” said Robert Rennie, Sydney-based chief currency strategist at Westpac Banking Corp., Australia’s second-largest lender. “The euro is looking expensive.” Gains in the dollar were curbed versus the yen before Bernanke delivers the Fed’s semiannual report on monetary policy to the Senate Banking Committee on March 1. A day later, he will testify before the House Financial Services Committee. “This will be an important week in deciding if the Fed will lag other central banks in hiking rates, which in turn, would set the dollar on a depreciation path,” said Philip Wee, a senior currency economist at DBS Group Holdings Ltd. in Singapore. “Bernanke so far has prioritized jobs over inflation in U.S. monetary policy.” The Federal Open Market Committee last month affirmed plans to buy $600 billion of Treasuries through June even as policy makers increased their projections for U.S. growth this year. Bernanke is seeking to reduce 9 percent unemployment by bringing about a “sustained period of stronger job creation,” he said on Feb. 3. To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net; Ron Harui in Singapore at rharui@bloomberg.net; To contact the editor responsible for this story: Rocky Swift at rswift5@bloomberg.net.

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