The US dollar rallied on Friday on the back of a strong reading on US economic growth as the euro’s woes deepened amid growing concerns over Greece’s debt problems.
Analysts said the dollar got a major boost after the US economy grew a much faster-than-expected 5.7 percent in the last three months of last year, the best reading since 2003.
At 10pm, the euro was at US$1.3862, down sharply from US$1.3966 in New York late on Thursday as the single currency held near its lowest level since July.
The dollar rose to ¥90.19 from ¥89.92 late on Thursday.
Dealers said the headline US growth figures were the main driving force for the US currency.
“Although the surge in growth was broadly expected, beating already elevated expectations was a much needed shot in the arm for confidence after several weeks of steady decline in risk appetite,” said Michael Woolfolk at Bank of New York Mellon.
Michael Malpede at Easy Forex said the dollar’s gains were reinforced by ongoing turmoil in Europe over public deficits and news that deflation is still hurting Japan.
“The yen was pressured by report of accelerating deflation in Japan and comments from the Bank of Japan [BOJ] governor which suggests that the BOJ is ready to act against potential market turmoil,” he said.
In late New York trade, the dollar was quoted at 1.0603 Swiss francs after 1.0520 on Thursday.
The pound was at US$1.5973 from US$1.6134.
Asian currencies fell last week, led by South Korea’s won and the Philippine peso, on concern tighter lending controls in China will damp regional trade as worsening public finances in Greece curb demand for emerging-market assets.
Investors pulled US$608.5 million from funds investing in developing countries’ equities in the week ended on Wednesday, the first outflows in 12 weeks, EPFR Global said. China’s banking regulator on Wednesday told banks to “reasonably control” loan growth, having earlier in the month ordered them to set aside more funds as reserves. India’s central bank yesterday lifted the cash-reserve ratio for banks by 75 basis points, more than economists forecast.
The won dropped 0.9 percent to 1,161.65 per dollar in Seoul, capping the biggest two-week slide since February last year, data compiled by Bloomberg showed. The Philippine peso sank 0.7 percent from Jan. 22 to 46.51, while Malaysia’s ringgit lost 0.3 percent to 3.4090.
India’s rupee slid 0.1 percent to 46.1782 last week against the dollar, a third straight decline. Singapore’s dollar fell 0.2 percent to S$1.4072 and Thailand’s baht dropped 0.5 percent to 33.19. The New Taiwan dollar and the yuan were little changed at NT$31.99 and 6.8268 respectively.
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