Asian currencies climbed against the dollar last week on anticipation of a US rate cut, but Japanese gains were capped by a domestic political crisis.
JAPANESE YEN: The yen stayed firm in the past week amid prospects of a US interest rate cut in the coming week, but domestic political turmoil capped the currency's top side. The yen stood at 115.00 against the dollar on Friday, up slightly from 115.10 the previous week.
During the week it reached the 113 level against the dollar, as players dumped the greenback on lingering worries over the US outlook, particularly in the wake of the first drop in US payrolls in four years.
"Until concern about the risk of a (US) recession has completely evaporated, the dollar will not make a full-blown recovery," said Hideaki Inoue, chief manager at forex trading at Mitsubishi UFJ Trust and Banking Corp.
But domestic political uncertainty pressured the yen, prompting investors to seek higher-yielding units elsewhere, dealers said. Prime Minister Shinzo Abe unexpectedly announced his resignation Wednesday after a sharp drop in popularity following a string of scandals and perceived weak leadership.
AUSTRALIAN DOLLAR: The Australian dollar is expected to remain volatile next week, although a US rate cut would provide it with a strong boost, dealers said. The Aussie dollar ended the week at 84.22 US cents, up from 82.64 the previous week.
AMP Capital Investors chief economist Shane Oliver said the US Federal Reserve was expected to cut the cost of borrowing when it meets on Tuesday, increasing the interest rate differential with Australia. He said the widening gap in Australian and US interest rates would make the Australian dollar an attractive option.
"While the Australian dollar may see more volatility in the short term, it is likely to head back up to around 89 US cents into year's end," Oliver said.
"Higher oil, gold and wheat prices along with a widening interest rate differential versus the US are all supportive of the Australian dollar."
NEW ZEALAND DOLLAR: The New Zealand dollar ended the week at 71.19 US cents, sharply up from 69.16 the previous Friday. Weakness in the US dollar was the main driver of the rise, rather than any factors driving the New Zealand currency higher, analysts said.
The ANZ Bank said weaker retail spending data released on Thursday, along with the central bank's decision to hold interest rates, were insignificant compared to offshore factors. The central bank monetary policy statement was supportive of the dollar with the prospect of a rate cut receding into the distant future.
The US dollar tumbled to a record low versus the euro on widespread expectations the Federal Reserve would start cutting interest rates next week to limit the US economy's slowdown.
HONG KONG DOLLAR: The US-pegged Hong Kong dollar ended the week at 7.79 to the US unit, from 7.78 a week earlier.
CHINESE YUAN: The yuan closed at 7.5150 to the dollar on Friday on the exchange-traded market, compared with Thursday's close of 7.5105, and a close of 7.5371 the week before.
On the over-the-counter market, it ended at 7.5175 to the dollar against 7.5105 the previous day. The central bank had set the yuan central parity rate at 7.5222 to the dollar on Friday, compared with 7.5169 on Thursday. The People's Bank of China allows a trading band of 0.5 percent on either side of the midpoint.
INDONESIA RUPIAH: The rupiah ended the week trading at 9,380/9,384 to the dollar, compared to 9,398/9,403 to the dollar a week earlier. PHILIPPINE PESO: The peso traded higher at 46.30 to the dollar on Friday afternoon from 46.53 on September 7.
SINGAPORE DOLLAR: The US currency was at 1.5126 Singapore dollars on Friday, from 1.5245 the previous week.
SOUTH KOREAN WON: The won further strengthened to a four-week high of 928.30 to the dollar, compared with 938.0 a week earlier, reflecting the greenback's global weakness. The won is likely to move between 925 and 932 in the coming week, dealers said.
TAIWAN DOLLAR: The Taiwan dollar fell 0.06 percent in the week to close at 33.071 against the US unit. The local currency closed at 33.050 a week earlier.
THAI BAHT: The Thai baht held stable against the dollar in the past week amid rangebound movement as investors remained cautious ahead of the Fed meeting, dealers said. The Thai unit closed on Friday at 34.24-25 baht to the dollar compared to last week's close of 34.26-27.
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