Swiss Franc Strengthens Against Major Peers as Crude Oil Climbs on Turmoil

The Swiss franc rose against all of its 16 most-traded counterparts as crude oil climbed to a 29- month high on concern turmoil in North Africa and the Mideast will disrupt supply, encouraging investors to seek refuge.

The dollar lost the most in a five days versus the euro in six weeks on speculation a gain in U.S. payrolls last month won’t be enough to spur the Federal Reserve to raise interest rates soon even as the European Central Bank prepares to lift its borrowing costs.

“We’re seeing a certain amount of flight to quality because of concerns in the Middle East,” said Dennis Cajigas, a senior market strategist at the brokerage MF Global Holdings Ltd. in Chicago. “The Swissie is making big moves largely due to that.”

The franc rose 0.8 percent to 92.45 centimes per dollar at 5 p.m. in New York, from 93.16 yesterday, and strengthened 0.4 percent for the week. It reached a record high of 92.02 centimes on March 2. The Swiss currency gained 0.6 percent against the euro to 1.2933, from 1.3013.

The greenback weakened 0.1 percent to $1.3987 per euro, from $1.3969 yesterday, after earlier gaining 0.2 percent. It reached $1.40 for the first time since Nov. 8. The shared currency was little changed at 115.13 yen, and the dollar fell 0.2 percent to 82.32 yen.

Bets on Euro

Futures traders increased bets the euro will gain versus the dollar to the most since January 2008, figures from the Washington-based Commodity Futures Trading Commission showed.

The difference in the number of wagers by hedge funds and other large speculators on an advance in the euro compared with those on a drop -- so-called net longs -- was 51,308 on the week ended March 1, the most since Jan. 11, 2008.

Forces loyal to Libya’s Muammar Qaddafi used tear gas and gunfire to suppress protests in Tripoli as rebels pushed their front lines westward to Ras Lanuf, an oil port town about halfway to the capital from opposition-stronghold Benghazi. The conflict has left 6,000 people dead, the opposition forces’ spokesman, Abdullah Al Mahdi, told Al Jazeera today.

Crude oil for April delivery rose as much as 3.2 percent to $105.17 a barrel in New York, the highest level since September 2008. U.S. stocks declined, with the Standard & Poor’s 500 Index dropping 0.7 percent.

The franc tends to strengthen during periods of financial stress because Switzerland’s export-reliant economy doesn’t need foreign capital to balance the current account, the broadest measure of trade.

The dollar fluctuated against the euro after Labor Department data showed U.S. employers added 192,000 workers in February, compared with a Bloomberg News survey forecast for 196,000. The unemployment rate unexpectedly fell to 8.9 percent, the lowest level since April 2009.

ECB ‘Out Front’

“The unemployment number was by no means a blowout number that’s going to make the Fed consider tightening any time soon,” said Boris Schlossberg, director of research at online currency trader GFT Forex in New York. “That leaves the ECB way out front in terms of interest-rate differential.”

The greenback tumbled yesterday after ECB President Jean- Claude Trichet said the central bank may increase interest rates at its next meeting to counter inflation pressures. Fed Chairman Ben S. Bernanke reiterated on March 1 in Senate testimony that while growth will quicken in the U.S., he still wants to see a “sustained period of stronger job creation.”

IntercontinentalExchange Inc.’s Dollar Index, which tracks the greenback against the currencies of six major trade partners, lost 1.1 percent for the week as investors speculated the Fed would lag behind other central banks in raising interest rates. The gauge is weighted 57.6 percent to movements in the euro, which surged 1.7 percent against the dollar this week, the most since the five days ended Jan. 21.

Brazil’s Real Falls

The Brazilian real dropped 0.3 percent to 1.6546 per dollar, erasing earlier gains, after a report that the nation’s government may announce new measures next week to curb the currency’s appreciation.

The moves could include a tax increase and stricter controls of foreign capital and could be announced March 9 or 10, the Sao Paulo-based IG news service reported without saying where it got the information.

New Zealand’s dollar fell against most major counterparts after the International Monetary Fund said it will likely cut the nation’s growth forecast.

The kiwi, as the currency is nicknamed, touched its weakest level in five months against the greenback. It reached 73.39 U.S. cents today, the lowest level since Oct. 1, before trading at 73.83 cents, down 1.8 percent from 75.16 on Feb. 25. It slipped 0.4 percent today.

N.Z. Earthquakes

The Reserve Bank of New Zealand will reduce its benchmark rate by 15 basis points over the next 12 months, compared with a prediction for an increase of 54 basis points a month ago, according to a Credit Suisse Group AG index. Two earthquakes in the past six months may have caused as much as NZ$20 billion ($15 billion) of damage, Prime Minister John Key has said.

The South Korean won gained versus most major peers, rising 0.5 percent to 1,114.60 per dollar. Asian currencies strengthened this week, with the Bloomberg-JPMorgan Asia Dollar Index increasing 0.4 percent, on speculation central banks will tolerate appreciation and raise borrowing costs to tame inflation.

To contact the reporters on this story: Allison Bennett in New York at abennett23@bloomberg.net; Catarina Saraiva in New York at asaraiva5@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net