Feb. 11 (Bloomberg) -- The dollar rose against all of its most-traded counterparts as speculation turmoil in Egypt will worsen, boosting demand for the safety of U.S. assets. The greenback headed for a third weekly gain versus the euro after Egyptian President Hosni Mubarak defied calls for his immediate resignation, agreeing only to delegate powers until an election in September. Australia’s dollar slid below parity with the greenback for the first time in almost two weeks after Reserve Bank Governor Glenn Stevens said policy makers judged it was “sensible” to keep interest rates on hold. “It’s not full-blown risk aversion yet, but people are just a bit cautious,” said Geoffrey Yu, a foreign-exchange strategist at UBS AG in London. “Egypt is one element, but people are looking at the growth outlook.” The dollar appreciated 0.6 percent to $1.3528 per euro at 8:08 a.m. in New York, from $1.3603 yesterday, when it rallied 1 percent. The greenback has appreciated 0.5 percent this week against the common currency. The dollar gained 0.6 percent to $1.5998 versus the pound and advanced 0.4 percent to 83.55 yen. The euro slipped 0.1 percent to 113.04 yen. Sweden’s krona slid to its February low against the dollar as equities declined, with the OMX Stockholm 30 Index dropping to its lowest level since Dec. 1. The krona depreciated as much as 1.2 percent to 6.5423 per dollar, its weakest level since Jan. 31, and headed for a weekly drop of 0.7 percent. Against the euro, Sweden’s currency slipped 0.4 percent to 8.8209. Dollar Index IntercontinentalExchange Inc.’s Dollar Index, which tracks the greenback against the currencies of six major U.S. trading partners, climbed as much as 0.6 percent to 78.697, the highest level since Jan. 21. The gauge has risen 0.7 percent this week in what would be its first five-day rally since Jan. 7. Mubarak said during a broadcast interview that he intended to stay on as president until the elections, while handing day- to-day powers to Vice President Omar Suleiman. Protests in Egypt, inspired by the revolt that ousted Tunisian President Zine El Abidine Ben Ali on Jan. 14, sparked concern that tension would spread in a region that holds more than 50 percent of the world’s known oil reserves. The MSCI Asia Pacific Index of shares fell 0.8 percent, the Stoxx Europe 600 Index slipped 0.2 percent and futures on the Standard & Poor’s 500 Index dropped 0.3 percent. Dollar Versus Yen The dollar was poised for a 1.7 percent weekly gain versus the yen, its biggest since Jan. 7, before a U.S. report economists said will show consumer confidence improved. The Thomson Reuters/University of Michigan’s preliminary index of consumer sentiment rose to 75, the highest level since June, from 74.2 in January, according to the median forecast of 68 economists in a Bloomberg News survey. The report is due at 9:55 a.m. New York time. “Stronger U.S. data has mainly resulted in a weaker dollar, as markets are treating the greenback as a funding currency,” Khoon Goh, head of market economics and strategy at ANZ National Bank Ltd. in Wellington, New Zealand, wrote in a report today. “But at some point, a stronger U.S. economy will eventually result in a strengthening in the dollar.” Australia’s dollar weakened for a third day versus the greenback as Stevens said in parliamentary committee testimony that there was no urgency to boost borrowing costs in the first half of the year, leading traders to cut bets on the amount of rate increases over the next 12 months. ‘Dovish Side’ “Stevens is leaning toward the dovish side, and that saw the Aussie drop, with his comments taking a rate hike out of the immediate picture,” said Tim Waterer, a foreign-exchange dealer at CMC Markets in Sydney. Traders cut their prediction for the amount of interest- rate increases by the Reserve Bank over the next 12 months to 35 basis points from 41 basis points yesterday, according to a Credit Suisse Group AG index based on swaps. Australia’s currency fell 0.5 percent to 99.94 U.S. cents, from $1.0044, after dropping to 99.66 cents, the lowest level since Feb. 1. “A lot of people have been building up positions maybe above parity, maybe above 99, and if you see the Australian dollar start to give way, in a meaningful way, below 98, I think you’re going to see a huge amount of money coming out of commodity currencies,” said Gerry Celaya, a senior currency strategist with Redtower Asset Management in Aberdeen, Scotland. South Korea’s won decreased for a third day after the central bank kept its benchmark rate at 2.75 percent, a result predicted by only 3 of 12 economists in a Bloomberg News survey. The others forecast an increase. The currency depreciated 1.1 percent to 1,128.47 per dollar, after sliding to 1,128.70, the weakest since Jan. 11. --With assistance from Masaki Kondo in Singapore. Editors: Dennis Fitzgerald, Dave Liedtka To contact the reporter on this story: Lucy Meakin in London at lmeakin1@bloomberg.net To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net

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