The Swiss franc climbed to a record against the dollar and the yen strengthened to an almost three- week high as the uprising in Libya drove oil toward $120 a barrel in London, spurring demand for the safest assets. The dollar fell to the lowest in three weeks versus the euro amid speculation the European Central Bank will raise interest rates before the Federal Reserve. It remained lower after U.S. jobless claims fell and durable-goods orders rose. The yen breached 82 per dollar for the first time since Feb. 8 as Libyan leader Muammar Qaddafi’s loyalists sought to crush dissent in the capital Tripoli. “The continued turmoil, which isn’t going to end any time soon, will keep commodities bid and that will continue to put pressure on risk, which will continue to help the yen and the Swiss franc appreciate,” said John McCarthy, director of currency trading at ING Groep NV in New York. The franc strengthened to a record 92.41 centimes per dollar, before trading at 92.60 at 8:55 a.m. in New York, up 0.8 percent from 93.30 yesterday. The euro rose 0.2 percent to $1.3776, after climbing to $1.3808, the strongest since Feb. 3. The yen appreciated 1 percent to 81.70 per dollar, its seventh straight day of gains, the longest run this year. The Japanese currency was 0.8 percent stronger at 112.56 per euro. Libya Violence Egyptians crossing back into their country across a border in the hands of Qaddafi’s opponents described attacks by Libyan government forces in the capital. Governments rushed to evacuate thousands of expatriates from Libya, which holds Africa’s largest crude reserves. Libyans claiming to have ousted Qaddafi’s troops organized committees to run and defend their eastern cities. Crude oil futures traded in London advanced to $119.79 a barrel, the highest since August 2008. Oil for April delivery topped $103 per barrel in New York. Saudi Arabia and other OPEC nations including those in West Africa are willing and able to replace any lost Libyan oil as soon as companies ask for it, including crude of the same quality, a Saudi Arabian oil official said. There’s no reason for oil prices to rise because Saudi Arabia and OPEC won’t allow shortages to exist, the official said by telephone today, declining to be identified by name. The euro appreciated versus the dollar as economists surveyed by Bloomberg News predicted a report tomorrow will show German’s European Union-harmonized consumer prices increased 0.5 percent in February after falling 0.5 percent in January. ECB Policy Makers ECB policy makers will make the decisions necessary to maintain price stability, President Jean-Claude Trichet told reporters yesterday in Frankfurt. The central bank will hold a policy meeting on March 3. The Fed has kept its key rate at zero to 0.25 percent since December 2008 to support the economic recovery. It repeated at its January meeting the rate will be low for “an extended period.” “I’m bullish on the euro,” said Adam Carr, a senior economist in Sydney at ICAP Australia Ltd., a unit of the world’s largest interdealer broker. The ECB “will be hiking in the next couple of months,” he said. The dollar rose against the pound before today’s U.S. housing data. New home sales declined 7.3 percent to a 305,000 annual pace in January, according to a Bloomberg News survey of economists before the Commerce Department reports the data at 10 a.m. New York time. Pound Versus Euro The pound slid as much as 0.6 percent to 85.32 pence per euro, the weakest level since Feb. 3, before trading at 85.05 pence. It slipped 0.1 percent to $1.6197. The Bank of England’s Spencer Dale joined Andrew Sentance and Martin Weale in voting for higher rates, minutes of the Feb. 10 meeting showed yesterday. The pound also fell after a report showed retailers expect no growth next month. Retailers saying sales volumes increased from a year ago outnumbered those reporting declines by 6 percentage points, compared with 37 percentage points in January, the Confederation of British Industry said today. An expectations gauge for March was at zero. Australia’s dollar rose for a second day versus its U.S. counterpart as a report showed business investment climbed in the fourth quarter. The Aussie strengthened versus 12 of its 16 major peers after the nation’s statistics bureau said business investment increased 1.3 percent from the third quarter, when it gained a revised 6.9 percent. The median forecast in a Bloomberg News survey of economists was for a 2.3 percent gain. ‘Bit of Risk’ “The Aussie bounced off the back of the capital expenditure numbers,” said Anthony Gray, head of foreign- exchange dealing in Sydney at Travelex Global Business Payments, a currency-exchange network. “A bit of risk is coming back into the market.” Traders are betting that Australia’s central bank will increase its benchmark rate 32 basis points over the next 12 months, up from 26 basis points yesterday, according to a Credit Suisse Group AG index. Australia’s currency strengthened as much as 0.6 percent to $1.0084 before trading at $1.0067. Orders for U.S. durable goods climbed 2.7 percent in January as demand for aircraft rebounded after plunging the previous month. The Commerce Department data was in line with a Bloomberg survey’s forecast for a 2.8 percent gain. The number of Americans filing first-time claims for unemployment insurance fell more than forecast last week to 391,000, the Labor Department reported. To contact the reporters on this story: Catarina Saraiva in New York at asaraiva5@bloomberg.net; Lukanyo Mnyanda in Edinburgh at lmnyanda@bloomberg.net To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

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