LONDON — The dollar strengthened against the euro Friday, as increasing unrest in Egypt led traders to seek safe-haven assets.
In late morning London deals, the shared eurozone unit fell to $1.3521 from $1.3601 in New York late on Thursday.
Against the Japanese currency, the dollar firmed to 83.52 yen from 83.20 yen on Thursday.
Egyptian President Hosni Mubarak clung to power on Friday, after wrong-footing the world by deciding not to quit the previous day despite ongoing protests.
"Developments in Egypt have forced investors to back off risk assets," said analyst Adrian Schmidt at Lloyds Banking Group.
The dollar is regarded as a safe investment in times of heightened geopolitical turmoil, while the euro is viewed as a riskier currency.
The Egyptian army threw its weight behind Mubarak on Friday, while trying to reassure protesters that it will ensure he follows through with democratic reforms.
"The tension in Egypt has seen some US dollar demand after President Mubarak decided that he would not stand down, after it being widely expected he would do so, fuelling some risk aversion," CMC Markets analyst Michael Hewson said.
"This aversion has not been helped by renewed concerns about inflation pressures after China again raised reserve requirements for some of its banks."
Earlier this week, China's central bank raised interest rates for the third time in four months as authorities fight to tame inflation and then required regional banks to increase their reserves.
In the eurozone, traders are on tenterhooks over mounting speculation over the next head of the European Central Bank.
German Chancellor Angela Merkel's spokesman said shed would meet Bundesbank head Axel Weber on Friday at 1400 GMT amid speculation he no longer wants to become ECB chief.
"After this meeting I think we will know more," spokesman Steffen Seibert told reporters.
Weber had been a front-runner to head the ECB and replace Frenchman Jean-Claude Trichet.
"The euro is experiencing a few distractions of its own, with the succession of Trichet at the ECB helm generating a great deal of debate," said analyst Schmidt.
In London on Friday, the euro changed hands at $1.3521 against $1.3601 in New York late Thursday, at 112.92 yen (113.18), £0.8442 (0.8447) and 1.3135 Swiss francs (1.3177).
The dollar stood at 83.52 yen (83.20) and 0.9715 Swiss francs (0.9689).
The pound was at $1.6013 (1.6097).
On the London Bullion Market, the price of gold climbed to $1,359.07 an ounce from $1,353.25 late on Thursday.
