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Sun, Dec 14, 2008 - Page 10 News List

US dollar rises from 13-year low


The US dollar rose from a 13-year low against the yen on speculation the Bush administration would use funds intended for financial institutions to rescue General Motors Corp and Chrysler LLC.

The yen pared its gain against major currencies on speculation investors will sell higher-yielding assets and pay back low-cost loans in Japan’s currency at a slower pace. The British pound weakened to a record low against the euro for a fifth day after HBOS Plc said bad loans will keep rising as credit conditions deteriorate.

The dollar traded at ¥91.07 in New York, compared with ¥91.45 the previous day, after dropping as much as 3.2 percent to ¥88.53, the lowest level since August 1995. The euro fell 0.2 percent to ¥121.82 from 122.09. The currency was quoted at US$1.3377, compared with US$1.3352.

Meanwhile, Asian currencies climbed this week, led by the South Korean won and the Indonesian rupiah, on optimism that interest-rate cuts and economic stimulus plans would revive demand for emerging-market assets.

All of the 10 most-active regional currencies strengthened this week as the Dollar Index slumped the most in at least a decade. The Malaysian ringgit touched a one-month high and the Philippine peso reached the strongest since Oct. 15.

South Korea, Japan and China said they enhanced their currency swap arrangements to ensure stability in the foreign-exchange market.

The won rose as much as 10 percent, the most since October, before paring gains to 7.5 percent to 1,372.50 per dollar, Seoul Money Brokerage Services Ltd said.

The yuan strengthened 0.56 percent last week to 6.8427 a dollar in Shanghai from 6.8812 at the end of last week, according to the China Foreign Exchange Trade System.

Thailand’s baht capped its best week in more than a year as the biggest cut in interest rates on record spurred optimism the economy will weather the global slump.

Malaysia’s ringgit headed for its biggest weekly gain since the end of a dollar peg in 2005, rising 1.5 percent this week to 3.5825.

The New Taiwan dollar advanced 0.7 percent to NT$33.315 against the US currency. The Philippine peso climbed 2 percent to 48.105.

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