http://www.bloomberg.com/apps/news?pid=10000103&sid=aDhfSO13Obkc&refer=usJune 8 (Bloomberg) -- The dollar had its biggest gain against the euro since April, and reached a six-week high versus the yen, as rising global interest rates sent emerging stock markets into a tailspin.
The European Central Bank lifted its benchmark rate for a third time since December today. Central banks of South Korea, Turkey, India, South Africa and Denmark also raised borrowing costs in the past 24 hours. The dollar rose the most since December when measured against a basket of the currencies of its major trading partners.
``Risk aversion is playing into the hands of the dollar,'' said Adam Myers, a currency strategist in London at UBS AG, the second-largest foreign-exchange trading bank according to Euromoney magazine. ``The prospect of higher interest rates globally is causing people to take off some bets in stocks and emerging markets.''
The dollar advanced against the yen for a fourth straight day to 114.17 yen at 1:53 p.m. in New York, from 113.57 late yesterday, reaching its highest since April 27. Its 1.1 percent gain to $1.2642 per euro was the biggest increase since April 7. The dollar rose 1 percent using the New York Board of Trade's Dollar Index and also climbed versus 15 of the 16 most-actively traded currencies tracked by Bloomberg.
Emerging market stocks have dropped 4.4 percent today, according to Morgan Stanley, taking their slide this week to 9.8 percent, the biggest drop since September 2001.
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