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Asian currencies mostly lower against dollar

Asian currencies ended the week mostly lower against the dollar amid global market turmoil and fears of a liquidity squeeze.

business Updated: Oct 05, 2008 08:57 IST

Asian currencies ended the week mostly lower against the dollar amid global market turmoil and fears of a liquidity squeeze.

Japanese Yen:
The yen remained stable to firm over the past week despite global financial troubles weighing on the stock market.

The Japanese unit stood at 105.28 to the dollar on Friday, up slightly from 105.68 a week ago.

The dollar rose briefly after the Bank of Japan's Tankan survey showed business confidence among major Japanese manufacturers at a five-year low.

But the greenback soon reversed course as Japanese exporters resumed profit-taking.

"Given the lingering worries over the US financial system, a dollar near 107 yen is the upper limit of the current range," Satoshi Okagawa, head of the foreign exchange forward trading group at Sumitomo Mitsui Banking Corp, told Dow Jones Newswires.

Australian Dollar:
The Australian dollar faces further declines after sharp falls took it to around a 14-month low in the past week, analysts say.

At 5:00pm on Friday the Australian dollar was trading at 78.02 US cents, down from the previous week's 83.20 US cents.

"Heightened risk aversion, a weaker outlook for global demand, declines in global equities, continued correction in commodity markets and a stronger US dollar has weighed on the Australian dollar," said ANZ economist Alex Joiner.

"Event risk remains high for the (Australian dollar) and the risks in the current environment are clearly for the downside."

AMP Capital Investors chief economist Shane Oliver also saw further falls ahead.

"With commodity prices likely to fall further and more rate cuts expected in Australia, further falls in the Australian dollar are likely over the next six months or so, with next stop probably around 75 US cents," he said.

But the slump should not be seen as the start of a long-term bear market, as the long-term trend in commodity prices was likely to remain up, Oliver added.

New Zealand Dollar:
The New Zealand dollar ended the week at 66.22 US cents, sharply down from 68.76 the previous Friday.

The local dollar slid about half a cent Tuesday amid global market turmoil after the US House of Representatives voted against a 700 billion US dollar government rescue package for the financial system.

Risk aversion by investors amid further market turmoil saw the kiwi weaken further at the end of the week as markets waited for the US House of Representatives to vote on a revised rescue package.

Chinese Yuan:
Chinese markets were closed for the week-long National Day holiday. The yuan closed on September 26 at 6.8434 to the dollar.

Hong Kong Dollar:
The US-linked Hong Kong dollar was at 7.771 to the greenback, compared with 7.777 the week before.

Indonesian Rupiah:
The rupiah ended trading Monday at 9,445 to the dollar compared with 9,405 the previous week. Indonesian markets were closed from Tuesday to Friday to observe a Muslim holiday.

Philippine Peso:
The peso fell to 47.040 to the dollar on Friday from 46.745 the previous week.

Singapore Dollar:
The dollar was at 1.4472 Singapore dollars on Friday from 1.4246 the previous week.

South Korean Won:
The won slumped to a 65-month low Thursday in a holiday-shortened week amid fears over a global liquidity squeeze.

The Korean currency plunged 36.5 won to close at 1,223.50 to the greenback on Thursday alone, the lowest since 1,237.80 on April 25, 2003.

The won, however, regained strength in New York Friday, where one-month non-deliverable forwards closed at 1,215 to the dollar, compared with 1,229 won the previous day.

A senior finance ministry official said the won's recent decline was excessive. It has fallen 30 percent so far this year against the US unit.

"We are determined to stabilise the foreign exchange market," Vice Finance Minister Kim Dong-Soo told journalists.

Taiwan Dollar: The Taiwan dollar ended Friday at 32.187 against the US dollar, down from 32.045 a week earlier.

Thai Baht:
The baht weakened against the dollar over the past week owing to greater demand for the greenback. The baht also fell in line with other currencies in the region, dealers said.

The Thai unit closed Friday at 34.17-19 to the dollar compared with the previous week's close of 33.93-95.