MW: Dollar gains vs. major rivals after Kim’s death
By Sarah Turner, MarketWatch
SYDNEY (MarketWatch) — The dollar gained against major rivals on Monday, with investors unsettled after reports that North Korean leader Kim Jong-il died over the weekend.
The dollar index DXY +0.07% , which measures the greenback against a basket of six currencies, traded at 80.449, rising from 80.216 in late North American trading on Friday.
The gains for the safe-haven dollar came amid reports that North Korean leader Kim Jong-il died on Saturday, according to state-run media.
His son, Kim Jong-un, was widely expected to replace his father as the nation’s leader. Read more on Korea
South Korea put its military on emergency high alert Monday following the news, according to a Xinhua news report.
“There is no question that markets will be volatile for a week or two,” Royal Bank of Scotland economist Erik Lueth said, responding to the reports from North Korea.
Lueth and his fellow RBS analysts said they believe that the chances of military aggression are limited but the chances of a regime collapse have increased with the reports of Kim’s death.
The South Korean won reacted sharply to the news, with the U.S. dollar jumping to 1,177 won, versus 1,158.50 won before the news.
The euro EURUSD -0.16% traded at $1.2990, slipping from $1.3030 late Friday, while the British pound GBPUSD -0.05% traded at $1.5482, down from $1.5507.
Against the Japanese yen USDJPY +0.12% , the dollar traded at ÂĄ77.96, edging up from ÂĄ77.82 Friday.
