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Sun, Jul 26, 2009 - Page 10 News List

Euro rises to near seven-week high as decline slows


The euro advanced to near a seven-week high against the dollar after reports showed the contraction in European manufacturing and services slowed more than forecast and German business confidence rose.

The 16-nation currency posted a second weekly gain versus the dollar and yen as signs of global recovery bolstered demand for higher-yielding assets. Sterling fell the most in more than a week against the euro as a report showed Britain’s economy shrank more than twice as much as economists forecast.

The euro climbed 0.5 percent to US$1.4214 at 4:15pm in New York, extending its advance this week to 0.8 percent. It touched US$1.4291 on Thursday, the highest level since June 3.

The euro appreciated 0.3 percent to ¥134.70 from ¥134.30, increasing 1.4 percent over the past five days. The dollar dropped 0.2 percent to ¥94.76 from ¥94.92.

The euro traded within US$0.03 above and below US$1.40 since early last month. The currency will oscillate at about US$1.42 next week, Strauss said.

Asian currencies had a second weekly gain, led by Indonesia’s rupiah, as pickups in South Korean economic growth and US home sales fueled optimism a global recovery will increase demand for emerging-market assets.

The Bloomberg-JPMorgan Asia Dollar Index, which tracks the 10 most-active currencies excluding the yen, this week reached its highest level in more than a month as data showed the pace of decline in exports from Japan and Taiwan eased. The MSCI Asia-Pacific Index of shares rose for a ninth day, its longest winning streak since 2004, after the Asian Development Bank said the region’s rebound from a slump may be “V-shaped.”

The rupiah jumped 1.8 percent this week to 9,998 per dollar in Jakarta, according to data compiled by Bloomberg. The South Korean won climbed 0.8 percent to 1,249.55, Malaysia’s ringgit gained 1.1 percent to 3.5295 and India’s rupee rose 1.1 percent to 48.23.

The New Taiwan dollar erased a weekly advance of 0.5 percent in the final minute of trading in Taipei, closing unchanged from last Friday at NT$32.955, on speculation the central bank intervened.

Appreciation may hurt exports, which account for about half of the country’s GDP.

Taiwan reported on Thursday that export orders, indicative of its shipments in one to three months, declined the least in eight months last month, while Japan said overseas sales fell at their slowest pace this year.

The Asia Dollar Index touched 108.28 on Monday, the highest level since June 10, and increased 0.3 percent this week. The benchmark regional stock index climbed 4.4 percent, its best performance in 11 weeks.

Elsewhere, the Singapore dollar advanced 0.7 percent this week to S$1.4413 against the US currency and the Thai baht gained 0.3 percent to 33.97. The Philippine peso was little changed at 48.067.

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