American focus: the risk is off

The dollar and Swiss franc advanced against the euro as a day of clashes in Egypt between police and protesters spurred demand for the safety of the currencies.

Egypt’s pound traded at almost a six-year low against the greenback as Fitch Ratings revised the Mideast nation’s outlook to negative and its dollar bond yields rose to record highs. Israel’s shekel was the biggest loser versus the dollar among Mideast currencies.

“This seems like classic risk aversion triggered by geopolitical concern,” said Paresh Upadhyaya, head of Americas Group of 10 currency strategy at Bank of America Corp. in New York. “It’s fueling oil prices higher, gold higher and the dollar higher. You’re seeing the euro drop, and euro-Swiss has regained its safe-haven status.”

Fitch lowered the outlook on Egypt’s debt rating to “negative” from “stable,” saying the protests increase the “uncertainty” over political and economic prospects.

Egyptian police fired tear gas as thousands of demonstrators pushed into Cairo’s Tahrir Square and trucks carrying riot police were pelted with rocks. Authorities restricted Internet and mobile-phone access and detained senior leaders of the Muslim Brotherhood, the main opposition group.