Libya Attacked by NATO? Oil Prices Leap, Dollar Falls

There’s a report that Libya’s air force may be challenged by NATO war planes. Planes from the US and perhaps from other countries may be launched to counter the Libyan air force, currently used to bombard civilians.

Muammar Gaddafi doesn’t impose any restraints on himself, and has a light finger on the trigger on his own countrymen. Here’s one source:

The source said NATO and US warplanes stationed in Italy may be ordered to take down Libyan planes, and that electronic warfare against them may already have been implemented.

The price of oil has leaped, with WTI Crude touching $103 before settling above $100. Yesterday saw a leap over $100, but it didn’t hold. Today we have another breakout.

Also the Swiss franc rides on the deteriorating situation in Libya. The safe haven currency reached all-time highs against the US dollar. USD/CHF went as low as 0.9240 before bouncing back to 0.9260 at the time of writing.

The dollar is generally weaker across the board, with EUR/USD reversing losses and climbing above 1.38. Sean Lee,  explains:

Our theory is that the selling is emanating from petro-dollar accounts in Switzerland who are benefitting from the increased oil revenues but wish to diversify out of USD.

Canada, an exporter of oil, doesn’t see it’s currency break current levels. USD/CAD is at 0.9837, still above the important 0.98 support line.

For more on the loonie, see the Canadian dollar forecast.