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 European shares were subdued, dragged down by airline and travel
stocks, souring overall sentiment towards high-yielding and riskier
assets after explosions at Brussels airport and a metro station
killed around 20 people.
"The news is having impact on sentiment," said Yujiro Goto, currency
strategist at Nomura. "Safe-haven currencies are being supported on
the headlines."
The yen rose to a 12-day high against the euro, rising almost 1
percent at one point. The yen also rose to a day's high of 111.38
yen per dollar, having traded lower before the start of the European
trading session.
The Swiss franc climbed to a more than two-week high of 1.08765
franc per euro <EURCHF=>. Both currencies are much sought-after
during times of turmoil in financial markets and uncertainty in the
global economy.
"Following the attacks in Paris last November, concerns about
similar future events in Europe may have a more prolonged impact on
the tourism and travel sectors, as well as a deterioration in
consumer sentiment," said Charalambos Pissouros, senior analyst at
IronFX Global.
Against the dollar, the euro was lower at $1.1205, after having
recoiled from Thursday's one-month high of $1.1342, with investors
ignoring the German IFO survey and euro zone purchasing managers'
surveys due to the explosions in Brussels.
The euro's losses saw the dollar index extend its rebound from a
five-month low as two Federal Reserve officials supported the view
that an interest rate hike is likely in coming months.
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The dollar index was up 0.3 percent at 95.603, pulling away from a
five-month trough of 94.578 set on Friday. Atlanta Fed President
Dennis Lockhart said there was sufficient economic momentum to
justify a further rate hike "possibly as early as the meeting
scheduled for end of April".
San Francisco Federal Reserve Bank President John Williams told
Market News International that April or June would be "potential
times for a rate hike".
The comments came a week after the Fed kept rates unchanged and cut
in half the number of projected hikes to a mere two this year.
While dollar bulls were heartened by the latest comments, the
reaction in fed funds futures <0#FF:> was muted as some investors
held back before speeches by more dovish Fed officials including
Chicago Fed President Charles Evans.
(Editing by Robin Pomeroy)
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