Fears that tensions between North and South Korea could escalate further have pushed the US dollar to a seven-week high against the yen and a two-month high against the euro. Investors are scurrying for the safety of the dollar in response to a comment from North Korea warning that the planned naval actions by South Korea and the US have pushed the region “closer to the brink of war”.
“The statement from North Korea only adds to tensions, and that leads to safe-haven demand for the dollar,†said Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. in London. “It’s very much a risk-off day. If investor confidence continues to crumble, then the euro could be between $1.27 and $1.30 by the end of the year.â€
