TOKYO: The Swiss franc hit an all-time high against the dollar in Asia on Thursday, as investors flocked to the safe haven currency amid fears turmoil in Libya will push oil prices even higher, dealers said.
Moamer Kadhafi's regime has lost vast swaths of Libya's east to an insurrection and the West is braced for a mass exodus from a "bloodbath" in the oil-rich African state, disrupting production of its high-grade crude.
This has pushed oil prices above $100 per barrel in a return to highs not seen since 2008 and prompting fears that the global economic recovery could be stalled, to the dollar's detriment.
The dollar fell to 0.9273 Swiss francs, below its previous record low of 0.9301 marked in December.
The euro rose to $1.3772 in Tokyo morning trade from 1.3746 in New York late Wednesday. The common currency fetched 113.22 yen compared to 113.37 yen.
The dollar eased to 82.20 yen from 82.46 yen.
"Risk-averse investors are snapping up the Swiss franc and the yen" amid intensifying violence in Libya, said Akihiro Tanaka, dealer at Resona Bank.
"Market participants have yet to figure out its impact on the global economy and concerns linger over how the turmoil would spread in the region."
Worries about Libya depressed global markets and drove up US oil prices to hit $100 a barrel for the first time since October 2008 on Wednesday.
"As equities fall, safe-haven currencies such as the Swiss franc stand to benefit," Masanobu Ishikawa, general manager of spot foreign exchange at Tokyo Forex & Ueda Harlow told Dow Jones Newswires.
"I think this trend is going to continue for now as the geopolitical tensions remain," Ishikawa said.
Despite the risk-aversion in the market, the euro firmed against the dollar on expectations that inflation pressures will prompt the ECB to raise interest rates, dealers said.
"Recent remarks by ECB board members gave rise to a view that a rate hike is on the horizon," Tanaka said.
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