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  • Apr 9th, 2007
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Major Asian currencies ended the week mixed against the dollar as Japanese dealing reflected concern over the US economy, but the Australian dollar peaked at a level not seen for more than 10 years.

JAPANESE YEN: The yen fell back against the dollar in the past week as market players weighed data which gave mixed prospects for the US economy.

The Japanese currency stood at 118.78-81 to the dollar late Friday, down from 118.03-06 to the dollar a week earlier, before the US Labour Department announced a stronger-than-expected gain in non-farm jobs for March.

The Labour Department said the US economy generated 180,000 non-farm jobs in March, up from the 135,000 widely expected by analysts and market participants.

The job data helped ease jitters about the US economic outlook, which followed weak indicators including a surprise decline in the non-manufacturing index released by the Institute of Supply Management.

They helped send the dollar above the 190-yen level in sparse trading on Good Friday in New York while the Japanese unit hit an all-time low of 159.68 against the euro there.

"The euro is near reigning supreme in the foreign exchange market as holding it is seen as a way to avoid risks," HSBC dealer Kosuke Hanao said. "Sentiment for euro-buying is expected to remain strong for the time being."

The European Central Bank raised its key interest rate to a five-and-a-half-year high of 3.75 percent last month and has signalled that a further rise is possible soon.

In contrast, the US central bank appeared to open the door to a cut in interest rates last month when it kept rates unchanged at 5.25 percent.

The yen rose to the week's local high of 117.46 to the dollar on Monday although the release of the Bank of Japan's quarterly business sentiment report stopped short of indicating an imminent hike in the country's extremely low interest rates.

AUSTRALIAN DOLLAR: The Australian dollar is expected to continue its surge against the greenback next week, pushing to levels not reached for almost 17 years, dealers said.

The Aussie was trading at 81.75 US cents at 5:00 pm Friday (0600 GMT), well up on the previous week's 80.77 US cents.

The currency peaked at 82.12 US cents on Friday - a level not reached since December 1996 - after rebounding from a fall prompted by the central Reserve Bank of Australia's (RBA) decision to keep official interest rates on hold for another month.

Dealers said the Aussie was likely to break above the 82.13 US cents level soon, despite this figure not being reached since October 1990.

"The risk of an RBA rate hike later this year remains intact," Commonwealth Bank currency strategist Besa Deda said.

"The terms of trade is at multi-year highs, base metal prices are at high levels, Asian and global growth is firm and the domestic economy is growing at a respectable clip.

"Further, the US dollar continues to soften. "All these factors could push the Australian dollar higher towards the previous highs of 83.89 US cents and 84.05 US cents." Australian markets are closed Monday for the Easter holiday.

NEW ZEALAND DOLLAR: The New Zealand dollar ended the week at 72.03 US cents, up from 71.38 US cents the previous Friday.

ANZ Investment Bank chief foreign exchange dealer Murray Hindley expected the kiwi to trade between 71.50 US cents and 72.50 in coming days. Bank of New Zealand currency strategist Danica Hampton said the NZ dollar's rise above 72 US cents during the week was spurred by active buying from a variety of offshore funds and other leverage-type accounts.

The market volatility earlier this month saw a sharp - but temporary - withdrawal from carry trades but returning confidence has seen carry trades in the New Zealand dollar resume. In carry trades, investors borrow low interest currencies to invest in higher yielding investments, such as the kiwi dollar.

CHINESE YUAN: The yuan closed at 7.7220 to the dollar Friday on the exchange-traded market, compared with Thursday's close of 7.7245, and a closing price of 7.7288 to the dollar the week before.

On the over-the-counter market, it ended at 7.8718 to the dollar against 7.8715 the previous day.

The central bank had set the yuan central parity rate at 7.7251 to the dollar Friday, compared with 7.7268 on Thursday. The People's Bank of China allows a trading band of 0.3 percent on either side of the midpoint.

HONG KONG DOLLAR: The US-pegged Hong Kong dollar ended the week at 7.81665, compared to 7.813 a week earlier.

INDONESIAN RUPIAH: The rupiah ended the week trading at 9,095/9,100 to the dollar, compared to 9,123/9,128 to the dollar a week earlier.

PHILIPPINE PESO: The Philippines peso traded higher at 48.05 to the dollar on Friday from 48.28 to the dollar on March 30.

SINGAPORE DOLLAR: The dollar was at 1.5144 Singapore dollars from 1.5168 the previous week.

SOUTH KOREAN WON: The won closed at 931.90 won per dollar, compared with 940. 90 won a week earlier, as the payment of stock dividends to overseas investors was winding down and exporting companies began selling their dollar earnings en masse.

Some dealers said foreign investors were re-investing their dividends in local stocks, pushing up the won against the US currency.

TAIWAN DOLLAR: The Taiwan dollar rose slightly during the week to close at 33.081 against the US dollar, against 33.089 a week earlier. Financial markets were closed Thursday and Friday for a national holiday.

THAI BAHT: The Thai baht moved rangebound against the dollar over the past week, trading between 34.70-90 to the greenback, as investors awaited a widely expected cut in a key interest rate by the Bank of Thailand and other potential foreign exchange measures, dealers said.

The Thai baht closed at 34.90-93 to the dollar on Thursday, compared with a 35.01-03 a week earlier. Thai markets were closed Friday for a national holiday.

Copyright Agence France-Presse, 2007


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