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Dollar gains in safe-haven rush as Syria worries mount

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(Globalpost/GlobalPost)

The dollar Wednesday rallied against other major currencies as the prospects of a military strike against Syria revived the safe-haven trade for the greenback.

Near 2200 GMT, the euro fell to $1.3341 compared with $1.3391 Tuesday night.

The dollar rose to 97.72 yen from 97.01 yen.

The euro bought 130.36 yen, up from 129.88 yen.

The Syria crisis has reverberated through financial markets as the US and other western nations plot a likely military strike against the country in the wake of its purported August 21 chemical weapons attack on its citizens.

A US State Department spokeswoman said the US was considering working with allies on the plan in spite of the Russian opposition at the United Nations Security Council.

The Syria talk triggered a flight to the safety of the US dollar, analysts said.

"The US dollar rose across the board as growing investor unease over Syria bolstered the safety trade," said Joe Manimbo, senior market analyst at Western Union Business Solutions.

"As long as Syria remains on the front pages, traditional haven instruments like the dollar, gold, and government bonds should continue to outperform their risky peers like stocks and growth-linked currencies of Canada, Australia and New Zealand."

David Song, currency analyst at DailyFX, said the dollar was also poised for further gains if there is a strong upward revision to US second-quarter growth in Thursday's report.

Kathy Lien, managing director at BK Asset Management, noted that the recovery in US equity markets after Tuesday's big drop suggested investors are taking the prospects of the Syrian military move in stride.

The latest discussion in Washington suggests a limited strike without an objective of regime change, she noted, and so some investors "feel Syria poses only a short and not long term risk for the markets."

Among other currencies, the pound slipped to $1.5524 Wednesday from $1.5542.

The dollar traded at 0.9222 Swiss franc from 0.9173.

jmb/pmh

http://www.globalpost.com/dispatch/news/afp/130828/dollar-gains-safe-haven-rush-syria-worries-mount