Investors continued to pour money into what they hope will be safe havens as concern mounted that US attacks are imminent.

The Swiss franc, traditionally a safe haven in times of turmoil, and perhaps more surprisingly the Japanese yen have been rising rapidly despite their governments' attempts to drive the value down.

Billions also poured into bonds and gold as investors fretted about the prospects of a prolonged war.

The so-called Swissie, jumped around two centimes to 20-month highs against the dollar and to a record high against the euro after Afghanistan rejected US demands to hand over Osama bin Laden, Washington's prime suspect for the attacks.

At the same time the Bank of Japan intervened again in the foreign exchange markets in a bid to drive down the price of the yen.

The Swiss were also attempting to reverse some of their currency's gains. The Swiss National Bank warned earlier that it was concerned about the franc's rapid rise and cut its interest rates on its securities repurchase agreements to reflect this.

Peripheral currencies were hit hard with the Australian dollar and the Swedish krona both suffering as a result of growing risk aversion.

Crude oil steadied after four days of declines as the threat of US military action hung over the Middle East producers.

Markets are concerned that the global economic outlook has worsened as fears mount of a prolonged US led war against terrorism, leaving politicians struggling to find words of reassurance.

Tension mounted after US President George Bush told Americans to steel themselves for a war on terrorism. And the woes are not confined to America. Germany's Ifo confidence survey which is the most closely watched indicator by the European Central Bank revealed a worse than expected August business climate.

Meanwhile the employers' lobby group IBEC has warned that the focus here must now be firmly directed to maintaining competitiveness.

Mr Brian Geoghegan, director economic affairs, said that Government must acknowledge that the hike in the cost of employers' PRSI in the last budget continues to be a huge blow to competitiveness and business confidence. "The 2002 budget must address this as a priority. Another priority in this situation is to move rapidly ahead with the National Development Plan, adding to the capacity of the economy to grow." He added that wage demands must relate to the new economic reality.