EU session review: Dollar, Yen advance on Middle East violence; Kiwi slumps after earthquake

Data released
09:00     Italy     Consumer confidence (February)    106.4    -    105.9
09:30     UK     PSNCR (January), bln    -14.4    -    25.5
09:30     UK     PSNB (January), bln    -5.3    -0.1    16.8

The yen and the Swiss franc rose against most of their major counterparts as violence in Libya boosted demand for the currencies as a refuge.
The dollar also advanced versus the majority of its peers. The Libyan government attacked protesters.
The euro pared its drop after European Central Bank council member Yves Mersch said the ECB may toughen its stance on inflation as early as next week.
“I would not be surprised at most colleagues concluding that we have upside risks to price stability,” Mersch said yesterday. With the economy strengthening and inflation in breach of the ECB’s 2% limit, policy makers will “inevitably” have to “rebalance our monetary policy stance,” Mersch said, without giving a timeframe. The Frankfurt-based ECB is scheduled to hold its next policy meeting on March 3.
The yen headed for its longest run of gains against the dollar this year even as Moody’s Investors Service lowered the outlook on Japan’s debt rating.
S&P cut Japan’s credit rating for the first time in nine years last month, citing a lack of a “coherent strategy” to address the nation’s debt burden.
New Zealand’s dollar slid versus all its major counterparts, dropping 2.4% versus the Swiss franc, after the 6.3 earthquake caused multiple deaths and toppled buildings.

EUR/USD regained its rise after it fell earlier to $1.3522 lows. Rate recovered to $1.3585 and remains a bit lower.

GBP/USD holds within the $1.6130/80 range.

USD/JPY recovered from Y82.80 to Y83.23.