The dollar fell the most in more than a week against the euro and dropped versus the yen and Korean won on a report South Korea will diversify its currency reserves.
The country's central bank, which has US$200 billion in reserves, will "diversify the currencies in which it invests," Reuters said on Monday, citing a spokesman from the Bank of Korea in a parliamentary report.
Byun Jai Yung, head of the bank's planning department, said in a telephone interview that he can't comment.
"Support for the dollar is quickly disappearing," said Kenichiro Ikezawa, who manages US$1 billion in overseas debt at Daiwa SB Investments in Tokyo. "This Korean story is having quite an impact because it feeds into suspicion that others are also seeking to cut their exposure to the dollar."
The dollar fell to US$1.3186 per euro at 8:04am in London, from US$1.3068 late on Monday in Toronto, according to EBS, an electronic foreign-exchange dealing system. It dropped to ?104.53, from ?105.54.
US markets were closed on Monday for a national holiday.
The US currency is up 3.8 percent from a record low of US$1.3666 versus the euro on Dec. 30.
"Korea is one the largest holders of foreign exchange reserves in the world, which means they will be able to buy more non-dollar currencies," said Greg Gibbs, a Sydney-based senior currency strategist at RBC Capital Markets.
South Korea has the world's fourth-largest reserves, behind Japan, China and Taiwan, according to information compiled by Bloomberg.
Korean investors, including the Bank of Korea, are the fifth-biggest foreign holder of US Treasuries, with US$69 billion as of December last year, the most recent figures available, according to the Treasury Department. Japan, the largest, has US$711.8 billion of marketable Treasuries.
The yen's gain accelerated after it reached ?105.40 per dollar, where pre-set orders to buy the Japanese currency were clustered, said Tsutomu Soma, a trader in Tokyo at Okasan Securities Co. The dollar's slide against the euro quickened after US$1.31, where some investors placed similar orders, said Jake Moore, a strategist at Barclays Capital in Tokyo.
"The sheer size of Korea's reserves makes it unignorable," said Tetsu Aikawa, currency sales manager in Tokyo at UFJ Bank Ltd, a unit of Japan's fourth-largest lender. "That revives the memory in people's minds how badly the dollar was sold when Russia said it was diversifying."
The US currency may weaken to US$1.32 per euro today [yesterday], he said.
A magnitude 7.8 earthquake struck off the southern coast of Mindanao in the Philippines at 7:38am today, prompting the US Tsunami Warning System to issue an alert for neighboring countries, including Taiwan. The system issued a purple alert indicating a "tsunami threat." The potential threat zone includes Taiwan, the Philippines, Papua New Guinea, Yap and Palau. Philippine authorities were assessing the damage from the quake, with the office of civil defense seeking to verifying initial reports that 15 people had been killed and 129 injured in the region, mostly from falling debris. Arlene Hollero, disaster chief of Maasim town in the Philippines' Sarangani Province,
‘GRAY ZONE’ PRESSURE: Beijing’s activities are intended to create the deceitful impression that China has jurisdiction over the area around Taiwan, the CGA said Taiwan’s rights over its territorial waters and exclusive economic zone must not be violated by any country, the Mainland Affairs Council said yesterday, adding that it will not accept any unprovoked actions. The council issued the remarks in response to the China Coast Guard conducting maritime enforcement drills near eastern Taiwan and claiming to fully exercise China’s maritime administrative law enforcement authority. The Coast Guard Administration (CGA) has been closely monitoring the situation and is taking concrete steps to defend the nation’s sovereignty and secure its waters, the council said. China has no sovereign rights over the waters off eastern
RESILIENCE: Taiwan plays a key role in semiconductors, energy, information infrastructure and advanced manufacturing, AIT Director Raymond Greene said Taiwan’s continued investment in deterrence and resilience remains vital, especially in uncrewed systems and other emerging technologies, American Institute in Taiwan (AIT) Director Raymond Greene said yesterday. Greene made the remarks at the annual National Strategic Summit on Supply Chain Resilience held by the Research Institute for Democracy, Society and Emerging Technology (DSET), a government-backed think tank. As Taiwan last year became the US’ fourth-largest trading partner and supply chain security is becoming more important, cooperation in emerging technologies continues to deepen between the two countries, he said. The US is committed to accelerating innovation, building key infrastructure, strengthening cooperation
The National Chungshan Institute of Science and Technology yesterday showcased its locally developed variants of the Vision 60 robotic patrol dog, which it plans to deploy on the nation’s outlying territories in the South China Sea. The variants were produced under the Joint Lab project — created by the institute and domestic companies — and assembled with domestically produced motors, lenses and artificial intelligence (AI) systems alongside licensed tech from the US, Missile and Rocket Systems Research Division deputy director Jen Kuo-kang (任國光) told the media event at a military base in Taipei’s Dazhi (大直) area. Taiwan has built up its strengths
RSS