Dollar hits record high in London

The Swiss franc hit a record high against the dollar on Thursday, boosted by safe-haven demand due to ongoing political turmoil in Libya, while the resulting surge in oil prices stung the US currency across the board. Brent crude oil leapt to its highest since August 2008 on concern that unrest that has cut more than a quarter of Opec-member Libya's output could spread to other producers including top exporter Saudi Arabia.
Worries over Libya, following recent uprisings in Tunisia and Egypt, helped the Swiss franc and to a lesser extent the yen, currencies that traders often buy at a time of uncertainty. While the dollar in the past has also benefited from the risk aversion trade, the US currency has come under selling pressure on concerns the US economy is the most vulnerable to higher oil prices at the moment.
The dollar fell to a record low of 0.9240 Swiss franc on electronic trading platform EBS, its slide having intensified after triggering stop-loss selling below its previous record low of 0.9301 set at the end of last year. One-month implied dollar/Swiss volatility continued to pick up, trading around 11.70 percent, but this was still well below levels of around 15 percent seen around the start of the eurozone debt crisis in April 2010.
The euro slid to around 1.2703 francs according to Reuters data, its lowest since January 13, before pulling back to 1.2739, down 0.7 percent on the day. It fell 0.7 percent to 112.54 yen. The yen rose broadly, pushing the dollar 0.8 percent lower to 81.83 yen. Traders cited dollar selling by Japanese exporters and model funds, as well as some liquidation of long dollar positions established since the beginning of the year.
The euro was slightly higher on the day against the dollar at $1.3760, staying supported on recent hawkish comments on inflation by European Central Bank officials which raised expectations the ECB may begin seriously considering an exit strategy from ultra-low rates, paving the way for tighter monetary policy. The dollar index fell to its lowest in three weeks at 77.011, down 0.4 percent on the day. Higher oil prices come at a time when the Federal Reserve is resisting raising rates in the face of rising inflation risks, and is widely expected to lag far behind the ECB and the Bank of England in monetary tightening.