Asian currencies up against dollar
May 25, 2009
Asian currencies ended the week higher against the dollar as fears of a possible US debt ratings cut cast a shadow over the greenback. JAPANESE YEN: The yen rebounded at the end of the week to hit a three-month high against the dollar as Japan’s finance minister ruled out market intervention to prop up the greenback amid fears of a US debt ratings cut. The Japanese currency stood at 94.78 against the dollar in New York on late Friday, compared with 95.19 a week earlier. In Tokyo trading, it touched the week’s high of 93.86 on Friday after Finance Minister Kaoru Yosano said Japan had no plan to tackle the strength of the yen, which is bad for exporters.
“We aren’t at all thinking about intervening in the foreign exchange market at this point,” he said.
The yen has climbed back from the weekly low of 96.70 seen on Tuesday.
“Investors now feel more at ease to sell the dollar,” Sumitomo Trust and Banking chief forex strategist Saburo Matsumoto said after Yosano made the remarks.
“They seemed worried about possible intervention by the government after the dollar fell below 95 yen. But after the minister’s remark, there is nothing to hold them back,” he said.
A Standard & Poor’s warning Thursday of a possible downgrade of Britain’s rating prompted fears the United States might be next, dealers said.
“Speculation about a downgrade of the US sovereign rating has grown and dragged the dollar down against other major currencies,” the Nikkei Quick News said, adding the trend could continue.
AUSTRALIAN DOLLAR: The Australian dollar could push towards 80 US cents in the coming week, with positive market sentiment buoying the currency, traders said.
The Australian dollar closed Friday at 78.11 US cents, up from the previous week’s close of 75.57 US cents.
“Market sentiment continues to matter more in the current trading environment than economic fundamentals,” said senior ANZ economist Katie Dean.
Forex-Asia-weekly-2 Last, HONG KONG “Not to ignore the apparent and even surprising durability of the global equity market rally, Australia’s higher yield environment, aggressive fiscal stimulus and signs of recovery in China are lending good support to the Australian dollar.” Dean said a wide trading range would persist, and there was a risk of mild downside correction in the short term, with strong support at 74.75 US cents and the possibility of a rise toward 79.30 US cents.
NEW ZEALAND DOLLAR: The New Zealand dollar finished local trading Friday at 61.48 US cents, up from 59.30 the previous week.
The kiwi gained as the US dollar plunged to its lowest level this year against a basket of currencies late in the week.
BNZ Capital currency strategist Danica Hampton said the sentiment for a weaker US dollar continued to dominate foreign exchange markets.
Dealers said the correlation between movements in foreign exchange markets and equities markets was weakening.
HONG KONG DOLLAR: The US-pegged Hong Kong unit ended the week at 7.7517, from 7.751 a week earlier.
INDONESIAN RUPIAH: The rupiah ended at 10,285 to the dollar, up from 10,460 the week before.
PHILIPPINE PESO: The Philippine peso strengthened to 47.04 to the dollar, from 47.64 the week before.
SINGAPORE DOLLAR: The dollar was at 1.4473 Singapore dollars on Friday from 1.4627 the previous week.
SOUTH KOREAN WON: The South Korean currency closed at 1,247.40 won against the dollar, compared with 1,257.0 a week earlier, reflecting the current global weakness of the greenback.
Dealers said Standard and Poor’s lowering of its ratings outlook for Britain to negative increased jitters over the dollar, amid fears the United States may be subject to a similar ratings decision.
But demand from importers and fears over a possible government intervention to support the US currency limited the dollar’s losses against the won.
The dollar is likely to move between 1,241 and 1,249 won when the market reopens on Monday, Yonhap news agency said.
TAIWAN DOLLAR: The Taiwan dollar closed Friday at 32.679 against the US dollar, up from 32.950 a week earlier.
THAI BAHT: The Thai baht rose against the dollar over the week, in line with worldwide sentiment about the US currency, a dealer said.
The Thai unit closed Friday at 34.33-34 baht to the dollar, as compared to 34.55-56 the week before.
Source: The New Nation
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