European debt problems, uncertainty about ECB weigh on euro
By Deborah Levine and Sarah Turner, MarketWatch
NEW YORK (MarketWatch) — The U.S. dollar rose for a second day against the euro and other major currencies, paring gains after Egyptian President Hosni Mubarak finally resigned.
Still, investors turned to the greenback for its safe-haven status, reflecting renewed uncertainty about Egypt as well as continued jitters about European sovereign debt.
The dollar index (DXY 78.44, +0.19, +0.24%) , which measures the greenback against a basket of six currencies, rose to 78.379, up from 78.221 late Thursday. It had risen as high as 78.697 earlier.
The euro (EURUSD 1.3540, -0.0005, -0.0369%) declined to $1.3558, down from $1.3603 in late North American trading Thursday.
The British pound (GBPUSD 1.6006, -0.0001, -0.0062%) fell to $1.6031 from $1.6096.
Against the Japanese yen, the dollar (USDYEN 83.4100, -0.0100, -0.0120%) edged up to 83.46 yen, compared with ¥83.35 Thursday. See real-time currency quotes and tools.
For the week, the dollar index is up 0.4%, and the dollar has gained 1.6% versus the yen.
The euro declined 0.2% and sterling lost 0.5%.
Vice President Omar Suleiman, in a brief statement on state television, said Mubarak ended his three-decade rule and delegated control of the country’s affairs to Egypt’s army. See The Wall Street Journal story on Mubarak resigning.
“We think having the military take over was the best solution in ending the deadlock between the protestors and Mubarak,” said Win Thin, currency strategist at Brown Brothers Harriman. “However, there are still more questions than answers with regards to Egypt’s ultimate fate and so investors must be prepared for ongoing volatility as the situation in Egypt remains far from clear.”
Late Thursday, Mubarak said he will transfer power following an election later this year — disappointing protesters in Cairo who had been pressing for his immediate departure. Read more on Egypt, Mubarak.
Traders often don’t want to hold onto riskier bets over a weekend, when anything can happen but they won’t be able to react, analysts said.
Also factoring into the foreign-exchange market were European debt worries, back on the front burner.
