Key Asian currencies ended the week mixed against the dollar as the United States announced hefty job loss figures and amid predictions of a US interest rate rise. The Thai baht fell further as foreign investors took fright over domestic concerns.
JAPANESE YEN: /The yen fell back to three-month lows against the US dollar on speculation about rises in US interest rates, which could encourage speculators to borrow the Japanese currency to invest overseas. The yen hit the week's low of 106.26 to the dollar before ending daytime trading at 106.03-05 to the dollar on Friday, down from 105.44-47 to the dollar a week earlier.
The US Labour Department announced late Friday the US unemployment rate jumped unexpectedly by a half percentage point to 5.5 percent in May, the steepest increase in more than two decades. The US economy lost 49,000 jobs in May, almost twice the number the prior month. The rise in joblessness exceeded market expectations of a 5.1 percent rate while the job loss was smaller than the consensus forecast of 60,000.
Barclays Bank foreign exchange strategist Toru Umemoto said before the announcement that a worse-than-expected reading could "knock the bottom out of the recent (market) optimism" and lead to dollar selling. Hironobu Hagi, deputy head of Shinsei Bank's capital markets division, had said that a positive employment report should "strengthen dollar-buying momentum as the dollar has steadily been on course to recovery."
European Central Bank president Jean-Claude Trichet suggested in the past week that official lending rates could go up in the eurozone as early as next month to tackle inflation. Meanwhile, US Federal Reserve chairman Ben Bernanke signalled that US rates have probably bottomed, sparking speculation that the next move in borrowing costs in the world's largest economy will be an increase.
AUSTRALIAN DOLLAR: The Australian dollar is expected to rise next week against a struggling greenback as the country's strong terms of trade and high interest rates boost the currency, dealers said. The Australian dollar was trading at 95.96 US cents at 5.00pm on Friday, up slightly on the previous week's 95.58 US cents.
AMP Capital Investors chief economist Shane Oliver said the prospect of at least one more interest rate before the end of the year was pushing the Aussie towards parity with the greenback. "The Australian dollar remains on track to hit parity sooner or later," Oliver said. Australia's interest rates are among the highest in the industrialised world at 7.25 percent and markets expected them to rise at least once before the end of the year.
While the Reserve Bank of Australia left rates unchanged this month, it warned it was prepared to tighten monetary policy to contain inflation and has predicted Australia's terms of trade will improve 20 percent this year.
NEW ZEALAND DOLLAR: The New Zealand dollar ended local trading Friday at 76.74 US cents, down frf the year, despite an expected spike in inflation to an 18-year high of 4.7 percent later in the year. Next Friday's retail sales data should confirm how weak the New Zealand economy is, dealers said.
ANZ chief dealer Murray Hindley said rallies above 77.10 US cents would be sold and for the moment the kiwi had support at 76.20 US cents.
CHINESE YUAN: The yuan closed at 6.9228 to the dollar Friday on the exchange-traded market, compared with Thursday's close of 6.9455, and a closing price of 6.9434 to the dollar last Friday.
On the over-the-counter market, it ended at 6.9230 to the dollar against 6.9465 in the previous day. The central bank had set the yuan central parity rate at 6.9238 to the dollar Friday, compared with 6.9394 on Thursday.
The People's Bank of China allows a trading band of 0.5 percent on either side of the midpoint.
HONG KONG DOLLAR: The US-linked Hong Kong dollar finished the week at 7.8108 to the greenback compared with 7.8054 the week before.
INDONESIAN RUPIAH: The rupiah ended the week's trading at 9,310 to the dollar compared to 9,320 to the dollar a week earlier.
PHILIPPINE PESO: The Philippines peso fell to 44.135 to the dollar on Friday afternoon from 43.750 on May 30.
SINGAPORE DOLLAR: The dollar was at 1.3665 Singapore dollars on Friday from 1.3660 the previous week.
SOUTH KOREAN WON: The won closed at 1,023.50 won per dollar Thursday, compared with 1,030.10 won against the greenback a week earlier.
The won gained strength for six straight trading days from May 26 before it fell back on Wednesday and then Thursday after a senior finance ministry official reportedly expressed "concern" over the won's appreciation Wednesday.
Earlier, government authorities intervened to help bolster the local currency to fight inflation amid record-breaking oil prices. Dealers said the local foreign exchange market had been being swayed by remarks by government authorities rather than fundamentals.
TAIWAN DOLLAR: The Taiwan dollar rose 0.26 percent in the week to June 6 to close at 30.335 against the US dollar. The local currency closed at 30.413 a week ago.
THAI BHAT: The Thai baht depreciated sharply against the greenback over the last week as foreign investors have pulled out of the local bourse, dealers said. The Thai unit closed Friday at a five-month low of 33.12-13 baht to one dollar compared to last week's close of 32.49-50.
Comments
Comments are closed.