The unfolding crisis between Israel and its northern neighbours Lebanon has seen oil top $78 dollars a barrel and currency investors moving funds into European 'safe havens'.

This morning the dollar was 1.8388 to the pound and at 0.8111 to the Swiss franc, a favoured safe currency in times of international crisis.

Currency speculators have become nervous following the attacks by both Israel and Lebanon that are threatening to destabilise the entire region, possibly drawing in Syria and other Arab nations. Rocket attacks by Lebanese militant group Hezbollah have hit dozens of sites in Israel and the Israelis have launched a large scale offensive against Lebanon destroying roads, bridges and the runway of Beirut's airport.

At least 60 have thought to have died so far.

"Risk aversion is starting to creep back into the marketplace," Richard Franulovich of Westpac Banking told Bloomberg.