Sun, Feb 03, 2013 - Page 15 News List

Asia currencies fall on weak yen

‘CURRENCY WAR’:Taiwan and South Korea led the regional drop, as monetary easing in Japan weakened the yen, prompting a Seoul official to warn of a global currency war

Bloomberg

The euro touched the highest level against the US dollar in 14 months as the European Central Bank’s (ECB) balance sheet contracted while the US Federal Reserve said it would keep pumping money into the US economy.

The 17-nation currency gained for a second week, its first back-to-back advance this year, amid data showing that Europe’s economy may be improving.

The shared currency rallied 1.3 percent to US$1.3640 this week in New York. It touched US$1.3711, the strongest level since Nov. 14, 2011. Against the yen, the euro climbed 3.6 percent, the most since February last year, to ¥126.66 and touched ¥126.97, the highest since April 2010.

The US dollar reached ¥92.97, the highest since May 2010, and gained 2.1 percent on the week to ¥92.77. It has never before risen for 12 straight weeks versus the Japanese currency, records compiled by Bloomberg dating to 1971 show.

The euro gained 4.8 percent over the past three months among the 10 developed nation currencies tracked by Bloomberg Correlation-Weighted Indeces. The yen tumbled the most with a 16 percent decline.

The European currency on Friday gained versus the US dollar and yen as a gauge of manufacturing in the 17-nation region last month rose to its highest level in almost a year.

The purchasing managers’ index increased to 47.9, the most since February last year, London-based Markit Economics said. It has been below the 50 level that signals contraction for 18 months.

The ECB’s balance sheet fell to 2.93 trillion euros (US$4 trillion) in the week ended on Jan. 25.

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