Sun, Aug 04, 2013 - Page 15 News List

Rupee leads decline in Asian currencies

Bloomberg and staff writer, with CNA

The US dollar rallied this week as a weaker-than-forecast unemployment report and the Fed pledge to keep buying bonds failed to erase speculation that policymakers will wind down the program this year.

The Bloomberg US Dollar Index snapped three weeks of declines even as the Fed said persistently low inflation could hamper the US’ economic expansion. The US Census Bureau may report on Tuesday that the trade deficit shrank in June.

The euro fell from a six-week high as the European Central Bank said interest rates may stay low for an extended period.

The Bloomberg US Dollar Index, which tracks the greenback against 10 other major currencies, gained 0.6 percent to 1,028.74 this week in New York, and touched the highest level since July 19.

The US dollar “holds its own until there’s more synchronized growth around the world,” Kathleen Gaffney, a portfolio manager Eaton Vance Corp said by telephone.

“We are going through a bit of an adjustment where the US continues to move forward, Europe has stabilized, Japan’s in question,” she said. “Between the three, the dollar wins out.

The US tender gained against all but two of its 16 most-traded peers on the week. It gained less than 0.1 percent to US$1.3276 per euro and rose 0.7 percent to ¥98.94 against the yen. Japan’s currency dropped 0.7 percent to ¥131.34 per euro.

The Aussie had the biggest decline among the US dollar’s major peers, falling to US$0.8916, as the Australian government predicted the budget deficit for the year ending on June 30 next year will be A$30.1 billion (US$26.8 billion), compared with its previous forecast of an A$18 billion shortfall.

The British pound fell 0.7 percent to US$1.5273 this week.

The UK currency depreciated 0.7 percent to £8690 per euro after depreciating to £0.8770 on Thursday, the weakest level recorded since March 12.

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