Asian currencies ended the week mixed against the dollar on hints the United States may cut interest rates again when the Federal Reserve meets on December 11.
JAPANESE YEN: The yen fell back against the dollar over the past week on prospects that further US interest rate cuts will help the world's largest economy to avoid a recession, amid the subprime loan crisis.
The Japanese currency stood at 110.28-30 to the dollar late Friday, down from 108.82-85 a week earlier, after hitting the week's low of 110.55 to the dollar.
US Federal Reserve chief Ben Bernanke hinted on Thursday that the Fed may cut interest rates again in December, saying the central bank sees a high degree of uncertainty in the US economic outlook.
Fed policymakers will need to be "exceptionally alert and flexible," he said in a speech. Most analysts are betting that the central bank will cut its key rates by 25 basis points when the Federal Open Market Committee meets on December 11, bringing total reductions this year to 1.0 percentage point.
"If the rate cut happens and ensures that the markets are functioning smoothly, then that may help the dollar," said Thomas Lam, treasury economist at United Overseas Bank.
The Japanese business daily Nikkei said on its Internet edition on Friday that financial markets in Japan next week would be "swayed by speculative deals focusing on the possibility of a rate cut."
"Expectations of an improvement in risk tolerance may help yen-selling to buy dollars. But on the other hand, the yen's downside will be propped up by prospects of a rate cut," it added.
AUSTRALIAN DOLLAR: The Australian dollar may struggle in the coming week as it attempts to maintain a sustained rally in the face of fears of more sub-prime mortgage losses in the US, dealers said. The Australian dollar ended the week at 88.64 US cents, up more than one cent on the previous week's 87.30 cents.
But dealers said the currency was vulnerable to any more bad news coming from the United States.
"The Aussie is vulnerable to further weakness in the short term on the back of uncertainty about the global growth outlook and commodity prices," said Shane Oliver, chief economist at AMP Capital Investors. "However, the broad trend is likely to remain up."
Easy Forex senior dealer Francisco Solar pointed out that the Aussie did not reach 89.00 US cents Friday and the currency tended to struggle during talk of more sub-prime exposure.
"The Aussie has been up there but there hasn't been any follow-through," he said.
NEW ZEALAND DOLLAR: The New Zealand dollar ended local trading on Friday at 77.35 US cents, up from 75.62 the previous week.
The kiwi continued to be underpinned by weakness in the US dollar, which reflects concerns about further US interest rate cuts.
The domestic focus in the coming week will be on the central bank's review of interest rates. Bank governor Alan Bollard is expected to keep rates on hold and signal it will keep them there in coming months because of persistent inflationary pressures.
Bollard will also have one eye on the global economy, but his focus will remain on inflation, which is expected to push up towards the upper band of the bank's mandated one to three percent target range, analysts said.
CHINESE YUAN: The yuan closed at 7.4048 to the dollar Friday on the exchange-traded market, compared with Thursday's close of 7.3820, and a closing price of 7.4106 to the dollar the week before.
On the over-the-counter market, it ended at 7.4000 to the dollar against 7.3824 the previous day.
The central bank had set the yuan central parity rate at 7.3997 to the dollar Friday, compared with 7.3983 on Thursday. The People's Bank of China allows a trading band of 0.5 percent on either side of the midpoint.
HONG KONG: The US-pegged Hong Kong dollar closed the week at 7.753 to the greenback, from 7.776 a week earlier.
INDONESIA RUPIAH: The rupiah ended the week trading at 9,365/9,375 to the dollar compared with 9,370/9,373 to the dollar a week earlier.
PHILIPPINE PESO: The Philippines peso strengthened to 42.75 to the dollar on Friday from 42.85 to the dollar the previous week.
SINGAPORE DOLLAR: The dollar ended the week at 1.4473 Singapore dollars from 1.4439 the week before.
SOUTH KOREAN WON: The won ended the week higher at 921.10 to the dollar as the greenback came under pressure because of possible US rate cuts.
A week earlier, the won closed at 930.60 to the US currency.
Dealers said the dollar was likely to remain weak for a while as possible US rate cuts dominate amid concerns over the subprime housing loan crisis.
They said the dollar-won rate was expected to move between 915 and 930 when the market reopens on Monday.
TAIWAN DOLLAR: The Taiwan dollar ended marginally higher at 32.268 against the US dollar, up from 32.324 a week earlier.
THAI BAHT: The Thai baht moved little against the dollar over the past week but held firm as the greenback remained under pressure, dealers said.
The Thai unit closed Friday at 33.84-85 to the dollar, compared with the previous week's 33.82-83.
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