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Euro rises in Asian trade on Israel-Gaza violence

The euro strengthened in Asian trade yesterday on concerns that renewed conflict in the Middle East might push up oil prices, dealing a further blow to the U.S. economy, dealers said.
The U.S. dollar often faces selling pressure against the euro during conflicts in the Middle East by highlighting Washington's heavy reliance on the volatile region's oil.
The euro bought US$1.4193, compared with US$1.4025 in New York on Friday, while rising to 128.36 yen from 127.30.
"The developments in the Middle East are likely to keep fuelling the euro at least for a day or two," Yuji Saito, head of foreign exchange at Societe Generale, told Dow Jones Newswires.
The European single currency meanwhile rose to an all-time high against sterling at 0.9664 pounds.
"The euro will probably touch parity with the sterling in two weeks," Saito said.
Sterling has fallen over the past month on expectations that the Bank of England will cut interest rates after gloomy economic data from Britain.
The dollar has also dropped sharply against the yen as more signs emerge showing that the U.S. economy is in a dire state.
The dollar was trading at 90.48 yen in the afternoon in Tokyo, down from 90.78 in New York on Friday.
"In the long run, yen-buying sentiment will emerge at some point, but it's still difficult to predict the timing," said Akira Takeuchi, a dealer at Chuo Mitsui Trust Bank.
"Since the market was already in winter holidays, full-fledged trading is expected to begin next week," Takeuchi said.
Dealers said the market could see limited movement until President-elect Barack Obama is inaugurated on Jan. 20 amid hopes that his administration will give a boost to the troubled U.S. economy.
The dollar was mostly lower in regional Asian trade.
It fell to 1,268.90 South Korean won from 1,288.90 on Friday, to 11,100 Indonesian rupiah from 11,150 and to 47.40 Philippine pesos from 47.54. The greenback declined to 1.4422 Singapore dollars from 1.4434 and to NT$32.99 from NT$33.00 but rose to 35.06 Thai baht from to 34.96.

Updated : 2021-07-26 00:30 GMT+08:00