London, Nov. 13 (Bloomberg) -- The dollar gained against the euro and the yen after reports the Taliban fled the Afghan capital Kabul and U.S. investigators said there is no evidence yesterday's plane crash in New York was the result of terrorism.
The dollar strengthened to 88.56 U.S. cents per euro, from 89.44 late yesterday. That's the highest level since it reached 88.26 on Sept. 6. Against the yen, it reached 121.33 per dollar, from 120.29.
``The war news has given the dollar a push,'' said Lorenzo Gallenga, who helps manage about 20 billion pounds ($29 billion) at Mellon Newton Asset Management. ``People have also realized that the plane crash, although tragic, was not an attack on the U.S., and that has helped.'' He said his fund favors the dollar over other major currencies.
Opposition forces entered Kabul after the Taliban fled the capital, the Afghan Islamic Press reported. That marks the biggest victory in the U.S.-backed campaign to oust the Taliban and capture Osama bin Laden, who is suspected of orchestrating the terrorist attacks on Sept. 11.
Investigators of the American Airlines plane that crashed in New York yesterday haven't discovered any evidence that it isn't an accident, according to Marion Blakey, chairwoman of the U.S. National Transportation Safety Board.
``In the last 12 hours the world situation has become a lot more secure for the U.S. -- that is helping the dollar,'' said Mark Austin, a currency strategist at HSBC Bank.
`Rebound the Fastest'
As investors see the threat of terrorism against the U.S. receding, some are betting the U.S. will be the first major economy to recover from the global economic slump.
``The U.S. is the one that has the chance to rebound the fastest,'' said Gallenga at Mellon Newton.
The U.S. Federal Reserve has cut its key borrowing rate 10 times this year to try to boost economic growth. By contrast, the European Central Bank has cut its benchmark rate four times.
The dollar also rose against the pound and the Swiss franc. It strengthened to $1.4495 per pound, from $1.4552 yesterday. Against the Swiss franc, it climbed 1.1 percent to 1.6535 francs per dollar from 1.6359.
The euro weakened after a report showed French consumer prices unexpectedly rose last month, which may hurt the chances of more interest-rate cuts from the ECB. Prices rose 0.1 percent from September, statistics office Insee said. Economists had forecast a decline of 0.1 percent. From a year earlier, prices increased 1.8 percent.
Yen Weakness
The dollar was boosted against the yen after officials at the Ministry of Finance signaled Japan may sell its currency to help shore up profits at companies that have overseas sales.
Zembei Mizoguchi, director-general of the MOF's international bureau, told reporters ``too much appreciation'' of the yen isn't favorable, and Japan will take action if necessary. Finance Minister Masajuro Shiokawa suggested on Saturday the government may sell the currency.
``We will see a lot of comments like these'' in an attempt to push the yen lower, said Stacey Seltzer, a currency economist at Brown Brothers Harriman & Co. ``This is a test of the Ministry of Finance's resolve to keep the currency above 120 yen per dollar.''
The MOF instructed the Bank of Japan in September to sell 3.2 trillion yen ($26.5 billion) to keep the currency from rising. Exports account for about 10 percent of the economy.
For the year ending March 31, Toyota Motor Corp., Japan's biggest automaker, and Mazda Motors Corp., the country's fifth- biggest, forecast their earnings using a rate of 121 yen per dollar, and won't get help from the currency unless the yen is weaker than that on average.
The yen also fell as Japan's Nikkei 225 stock average briefly dropped below 10,000 for the first time in a month. Bank stocks fell for the eighth day in nine.