Sun, Nov 29, 2015 - Page 15 News List

Weak euro, ECB put pressure on Asian currencies

AFP and staff writer, with CNA, TOKYO

The euro on Friday hovered around seven-month lows on the US dollar and was also weak against Asian currencies on speculation that the European Central Bank (ECB) will unleash fresh stimulus measures next week.

Further action by the ECB to boost the 19-nation eurozone economy was likely to heap pressure on Asian policymakers to loosen monetary policy in a bid to push down their units to stay competitive, analysts said.

The common currency declined against the yen on Friday, while it has also lost ground in recent days against the South Korean won and Singapore dollar, among other emerging units.

“[Asian] currencies don’t look that cheap,” Mitul Kotecha, head of Asian foreign-exchange and interest-rate strategy at Barclays in Singapore, told Bloomberg News. “When you look at real-effective rates, they haven’t weakened significantly. That’s why there’s probably still more room for further depreciation.”

Speculation that the ECB will announce further measures at its policy meeting next Thursday have also revived expectations that the euro may soon hit parity with the dollar for the first time since 2002.

On Friday, the euro weakened to US$1.0617 and ¥130.02 from US$1.0622 and ¥130.18 in Asian trade on Thursday.

The dollar gained against a string of emerging currencies, rising 0.49 percent against the won, 0.47 percent against Malaysia’s ringgit and 0.23 against Thailand’s baht. It also advanced against the Singapore dollar.

The US dollar rose against the New Taiwan dollar on Friday, gaining NT$0.114 to close at NT$32.815 after the central bank continued its efforts to prop up the US currency and drag down the local unit for the sake of Taiwan’s exports, dealers said.

The central bank’s intervention helped the US dollar post gains at the close for the second consecutive session, the dealers said.

The greenback opened at NT$32.520, the lowest level of the day, but rebounded to the day’s high at the close. Turnover totaled US$770 million during the trading session.

The US dollar opened lower against the NT dollar as traders locked in their gains posted a session earlier on the back of the local central bank’s presence, the dealers said, adding that many foreign banks stood on the sell side for the US dollar.

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