The US dollar rose, poised for the biggest quarterly gain versus the euro since 2008, as European leaders’ struggle to forge a plan to bail out Greece pushed investors toward the perceived safety of the greenback.
The yen fell against all 16 of its most-traded counterparts this week as Japanese consumer prices dropped for a 12th month, increasing the chances the nation’s central bank will lag behind its peers in raising interest rates.
The US dollar appreciated 0.9 percent to US$1.3410 versus the euro, from US$1.3530 a week earlier. It was headed for a gain of 6.8 percent for the quarter, the largest since it advanced 11.8 percent in the three months ended in September 2008.
The yen dropped 2.1 percent, the most since Dec. 4, to ¥92.52 per US dollar, from ¥90.54 on March 19. The euro rose 1.3 percent to ¥124.06, from ¥122.51 last week.
The pound declined for a second week against the greenback on concern the recovery has yet to take hold and as investors bet the government isn’t acting fast enough to cut the budget deficit.
Sterling depreciated 0.9 percent in the week to US$1.4876 as of 5:38pm in London on Friday, and traded as low as US$1.4799, its weakest level since March 1. It fell against the dollar in three of the five trading days. Against the euro, the pound was little changed on the week at £0.9008.
Asian currencies declined this week, led by the Singapore dollar and South Korean won, as discord among leaders in European nations on how to solve Greece’s debt woes curbed investor appetite for emerging-market assets.
The won declined 0.5 percent for the week to 1,138.80 against the US dollar in Seoul and on Friday touched 1,148.40, the lowest level since March 3. The Singapore dollar fell 0.6 percent to S$1.4043.
Central banks in Taiwan and Thailand this week stressed they would intervene in currency markets after their respective exchange rates reached the strongest levels in at least 18 months.
The New Taiwan dollar traded unchanged on Friday at NT$31.88 against the greenback, and fell 0.3 percent during the five-day period, according to Taipei Forex Inc. It has dropped 0.7 percent from a September 2008 high of NT$31.667 on March 18.
The central bank said on Thursday it would enter the currency market when necessary to “maintain order” if “irregular factors caused large fluctuations.”
The baht traded little changed on Friday at 32.43 against the US dollar and dropped 0.4 percent from March 19, the first weekly slide in almost two months, according to data compiled by Bloomberg.
Indonesia’s rupiah fell 0.3 percent this week to 9,128 per dollar, while Malaysia’s ringgit lost 0.2 percent to 3.3070. The Philippine peso and China’s yuan were little changed at 45.507 and 6.8274 respectively.
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