THE US dollar scaled a fresh 13-month peak versus the euro yesterday, while the yen surged broadly as investors dumped risky assets amid anxiety over the lack of a co-ordinated global response to the credit crisis.

Traders drove the euro below $1.35 to the dollar, taking a dim view of the weekend decision by leaders of Europe's four biggest economies against a co-ordinated bailout plan.

The heightened risk aversion, which saw heavy selling of stocks globally, put the yen on track for its largest one-day gain versus the dollar since the Asian crisis in 1998, and its strongest day against the euro since the launch of that currency in 1999.

Both the dollar and the yen rallied sharply against higher-yielding currencies such as the Australian and New Zealand dollars as investors sought cover from the storm engulfing financial markets.

"Everybody is running for the dollar as a safe-haven proxy right now simply because a lot of the short-term paper like US Treasury bills are dollar-denominated and that's where everybody wants to park their money," said Boris Schlossberg, director of FX research at GFT Forex in New York. - (Reuters)