The US dollar fell against all of its most-traded counterparts as US Federal Reserve officials made statements encouraging speculation the central bank will increase purchases of US debt to keep interest rates low.
The greenback declined for the third consecutive week against the euro to a six-month low as rhetoric from the Fed damped demand for US assets.
“The dollar seems to be the ugliest girl at the dance,” said Lane Newman, director of foreign exchange at ING Groep NV in New York. “The main catalyst for dollar weakness would be communication from the Federal Open Market Committee this week that quantitative easing is on the table and the euro has gone from the worst currency to own to the best on the back of ‘anything but the big dollar.’”
The greenback declined 2.2 percent to US$1.3790 per euro, the weakest level since March 17, from US$1.3492 the previous week. The euro was the strongest weekly performer against major currencies.
The US currency weakened to ￥83.27, from ￥84.21 the previous week. It touched ￥83.16 on Friday, the lowest level since Japan intervened in foreign-exchange markets on Sept. 15. The euro advanced 1 percent to ￥114.81, from ￥113.62.
The pound fell against the euro for a third week as data showing consumer confidence deteriorated and speculation that the Bank of England might resume its bond--purchase program damped demand for the currency.
The pound fell 0.3 percent to ￡0.8704 per euro on Friday, as of 5pm in London, extending its weekly decline to 2 percent. That was the weakest since May 20. Sterling was 0.7 percent stronger at US$1.5821 and appreciated 0.4 percent to ￥131.80.
Asian currencies completed a fifth weekly advance, the longest winning streak since March, as global funds pumped more money into Asian assets to profit from the world’s fastest economic growth.
The Bloomberg-JPMorgan Asia Dollar Index climbed to the highest level in more than two years after the Asian Development Bank this week raised its growth forecast for Asia excluding Japan for this year to 8.2 percent, from an April estimate of 7.5 percent.
South Korea’s won led gains with a 2.2 percent weekly jump to 1,130.45 per US dollar in Seoul, according to data compiled by Bloomberg. India’s rupee and the Thai baht were the next best performers, advancing 1.7 percent to Rs44.48 and 1.6 percent to 30.21 baht respectively, as of 5pm in Mumbai.
The New Taiwan dollar had its biggest weekly gain since May last year as the central bank raised interest rates for the second time this year and Chinese data suggested demand was strengthening in Taiwan’s biggest export market.
The NT dollar closed at NT$31.31 against its US counterpart on Friday, up 0.1 percent from Thursday and 1 percent higher than a week ago, according to Taipei Forex Inc. It touched NT$31.066 in the final hour of trading, the strongest level since August 2008.