The currencies of Asian nations ended generally higher vis-à-vis the US dollar last week as they were boosted by investors’ increasing appetite for risk brought about by indicators of global economic resurgence.
Japanese yen: Japan’s unit rallied to close at a 7-and-a-half-month high versus the greenback as traders opted to go back to high-yielding, high-risk assets amidst expectations that the US will be maintaining its ultra-low rate of interest for at least a few more months.
The yen closed at 89.60 against the greenback in New York last Friday, improving from 91.23 the previous week. It even peaked at 89.51 during the day.
The appetite of investors for riskier currencies than the greenback, which is considered a safe-haven unit, was given a boost as the leaders of the world’s most economically advanced nations met during the G-20 summit.
The G-20 member nations seemed to make “an implicit statement saying they will not engage in a competitive devaluation,” noted Scotia Capital’s Sacha Tihanyi. “It’s a reiteration of allowing markets to decide exchange rates and not to use monetary policy to get a trade advantage.”
Japan’s currency, the third most-traded unit in the foreign exchange market, was also boosted by the remarks of Hirohisa Fujii, Japan’s newly appointed Finance Minister. Fujii hinted that he will not interfere in any way to hinder the yen’s further growth in strength.
Australian dollar: The upward surge of Australia’s currency carried on in spite of some weakness in the latter part of last week. Dealers said that the Australian dollar is right on track to achieve parity with the US dollar in the long term.
The Aussie dollar, a commodities-based unit, ended at US¢86.93 last Friday, up from US¢86.74 the previous week but off the US¢87.41 recorded at Thursday’s closing.
Shane Oliver, the chief economist at AMP Limited, noted that the Aussie dollar was susceptible to a short term correction following a big surge from US¢0.63 since February. He added, though, that the negativity towards the unit will most likely be short-lived.
S.Korean won: The currency of South Korea continued to grow strong last week and ended at 1,186.10 against the US dollar last Friday, compared to 1,207.80 the previous week. Dealers predict that the won will likely continue to be strong against the US dollar unless the South Korean government intervenes.
Singapore dollar: The Singaporean currency closed at 1.4175 against the greenback last Friday compared to 1.4144 recorded the week before.
Chinese yuan: The Chinese unit ended at 6.8282 against the greenback last Friday, up from 6.8279 the previous week.
Philippines peso: The currency of the Republic of the Philippines climbed to 47.315 against the greenback last Friday from 47.700 recorded on 18 September 2009.
Indonesian rupiah: The Indonesian monetary unit closed at 9,660 against the US dollar, compared to 9,730 the previous week.