Yen stands firm amid U.S. interest rate fears
Yen stands firm amid U.S. interest rate fears
HONG KONG (AFP): The Japanese yen steadied against the dollar during the week, in line with the euro, after the European Central Bank (ECB) decided to keep interest rates unchanged.
Other Asian currencies were generally down due to continued fears of further U.S. interest rate hikes. Rioting in Indonesia and continued security concerns in Philippines led to falls in the Rupiah and the Peso respectively.
The Japanese yen firmed against the dollar during the week in line with the euro's rebound against the U.S. currency, dealers said.
The yen traded at 107.44 to the dollar in Tokyo late Friday, up from 107.85 a week earlier.
The Japanese currency rose to the 106 level on Monday as speculations mounted that the Bank of Japan would soon end its low-interest rate policy.
It traded in a narrow range Tuesday after falling back to 107.10 in New York trading the previous day.
The yen continued to move narrowly until Thursday as investors receded to the sideline ahead of the ECB council meeting.
The ECB left its rates unchanged in Thursday's meeting, but investors expected a rate hike in future meetings, dealers said.
"Many investors are predicting the ECB may raise interest rates when they meet next time after leaving them unchanged this time," said Fuji Bank dealer Yoshiyasu Naruse.
With little in the way of stimulus, the Australian dollar looks set to maintain its level of around 57 US cents in the week ahead.
"I think the market would be wary of pushing the Aussie too far," said AMP Asset Management senior portfolio manager Chris Loong.
"There's likely to be sellers coming in around 57.70, and we're talking technical resistance around 57.80."
The local currency closed the week at 57.07 US cents from 57.42 US cents the week before.
Colonial State Bank economist Craig James said much still depended on interest rate uncertainty although softer data this week added to expectations the central bank will not raise rates when it meets next month.
On the Reserve Bank's Trade Weighted Index it was at 51.4 points from 52.0 previously.
The New Zealand dollar closed Friday at 45.33 US cents down from 46.50 US cents the previous week.
The kiwi traded in light flows Friday, a currency dealer said.
"It's been a pretty quiet day today -- the kiwi has traded in a range between about 45.26 US cents and 45.65 US cents."
Another forex dealer said the New Zealand dollar had followed the Australian dollar on a gradual downward slide, but said the market had lost some of its nervousness.
The Hong Kong dollar was trading at 7.7917-7.7922 to the US dollar Friday, down on the previous week's 7.7908-7.7902.
The Singapore dollar depreciated to 1.7332 against the US dollar Friday from 1.7269 on May 20 on continued expectations that US interest rates will move higher, dealers said.
The Taiwan dollar declined 0.4 percent against the dollar over the week to close at 30.808 on Friday due to the strength of the US dollar in the international market and Taiwan's weaker stock market, dealers said.
The currency stood at 30.709 Monday weakening to 30.824 Wednesday before recovering slightly to 30.813 Thursday.
The Philippine peso ended the week lower at 42.72 to the dollar from 41.67 the previous week. The peso had hit a new 19- month low of 43.40 on Thursday due to security concerns and fears of more US interest rate hikes.
The South Korean won further weakened from 1,122.70 won per dollar a week ago to 1,136.5 won Friday, reflecting uncertainties in money markets worsened by concerns over the credit crunch faced by the Hyundai Group.
"If market jitters continue, the dollar-won exchange rate may reach 1,150 won to the greenback," a dealer at the Korea Exchange Bank said.
The Indonesian rupiah closed at 8,455 to the dollar Friday slightly weaker than last week's close of 8,450 after falling as low as 8,560 earlier in the day because of violence in Jakarta.
Trading in the Thai baht last week was in line with regional currencies, particularly the Philippine peso, following the sharp fall of the Bangkok bourse, dealers said.
The Thai stock exchange tumbled 8.8 percent, or 30.32 points, over the week.
The Thai unit closed Friday at 39.07-13 baht to the dollar compared to the previous week's close of 38.97-39.00.