Asian currencies ended the week lower against the dollar as the greenback gained ground on the back of stronger than expected US economic data and hopes of US rate cuts.
JAPANESE YEN: The Japanese yen eased in the past week, but market players saw the unit possibly swinging upward amid revived talk of a future interest rate hike, dealers said.
The yen stood at 109.01 to the dollar on Friday, down from 108.93 a week ago. "The inflation figure caused some yen-buying since it was quite high. The markets reacted naturally," said Kenichi Yumoto, vice president of forex sales at Societe Generale.
Core inflation surged to 2.4 percent in July as prices rose for the 10th straight month on the back of soaring energy and raw material costs, the sharpest increase since October 1997.
While markets do not expect Japan to raise its super-low rates any time soon, the data came a day after Bank of Japan member Miyako Suda said that the central bank was prepared for a hike once the economic slump was over.
AUSTRALIAN DOLLAR: The Australian dollar was likely to fall in the coming week if the central bank cut interest rates as expected, analysts said. At 5:00pm on Friday the Australian dollar was trading at about 86.10 US cents, well down from 87.88 a week earlier.
Harley Salt, head of sales trading at IG Markets Australia, said if the Reserve Bank of Australia cut its official cash rate by 0.25 percent to 7.00 percent as expected on Tuesday, the Aussie would likely trade lower.
"The interesting thing will be if they cut it by half a percent, by 50 basis points. If they do it by 50, that will definitely push the Aussie lower," he said. Shane Oliver, head of investment strategy and chief economist at AMP Capital Investors, said the Aussie fell in the past week as the greenback strengthened on the back of stronger than expected US economic data.
"While the Aussie has the potential to bounce back to around 90 US cents after its recent sharp fall, the cyclical trend is now down as the combination of falls in Australian interest rates and a correction in commodity prices suggests the currency has more downside ahead of it over the next six months or so, possibly to around 80 US cents," he said.
"However, the long-term trend in the Aussie is likely to remain up in response to the long-term rising trend in commodity prices."
NEW ZEALAND DOLLAR: The New Zealand dollar ended the week of local trading at 70.52 US cents, down from 71.87 the previous Friday. kThe kiwi tumbled after last week's local close due to renewed strength in the greenback due to lower oil prices and hopes of US rate cuts.
The New Zealand currency dipped below 69 US cents midweek, pulled down by a weaker Australian dollar, but regained the 70 cent mark after a survey showed strengthening local business confidence.
CHINESE YUAN: The yuan closed at 6.8409 to the dollar Friday on the exchange-traded market, compared with Thursday's close of 6.8313, and a closing price of 6.8347 to the dollar the previous Friday. On the over-the-counter market, it ended at 6.8400 to the dollar against 6.8275 the previous day.
The central bank had set the yuan central parity rate at 6.8345 to the dollar Friday, compared with 6.8326 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 7.807 to the greenback compared with 7.81 the week before.
INDONESIAN RUPIAH: The rupiah ended the week's trading at 9,155 to the dollar, down from 9,147 a week earlier.
PHILIPPINES PESO: The peso fell to 45.925 to the dollar from 45.650 the previous week.
SINGAPORE DOLLAR: The dollar was at 1.4157 Singapore dollars on Friday from 1.4054 the previous week.
SOUTH KOREAN WON: The won continued its descent over the past week, falling to 1,089.0 to the dollar Friday from 1,062.50 a week earlier. The won further weakened as foreign investors kept dumping local shares and oil refiners bought the greenback for import settlements, dealers said. The news that South Korea's current account swung to a deficit in July also increased pressure on the won, they said.
TAIWAN DOLLAR: The Taiwan dollar ended the week at 31.520 against the US dollar, down from 31.370 a week earlier.
THAI BAHT: The baht fell to a 12-month low during the week due to a political stand-off between the government and protesters who are besieging the main government house, dealers said. The Thai unit closed Friday at 34.20-22 to the dollar, down from the previous week's close of 33.91-94.