The dollar jumped against the euro on Friday on concerns over Greece’s budget deficit and weak US economic data that led to an investment flight to the safe-haven greenback.
The euro fell sharply to US$1.4385 at 10pm from US$1.4501 late on Thursday in New York, falling below the psychological 1.4400 level for the first time in a week.
The single European unit hit an intra-day low of US$1.4356, it lowest since Dec. 21.
The dollar however fell against the Japanese currency, another safe haven, to ¥90.82 from ¥91.23 a day earlier.
The market was dogged by persistent fears that other debt-stricken eurozone members could face the same fate as debt and deficit-ridden Greece.
German Chancellor Angela Merkel denied on Friday that she had sought to criticize Greece a day earlier with a forecast that the euro would face a “very difficult phase” because of Athens’ budget crisis.
In rare critical remarks made on Wednesday, Merkel had voiced concern that “the euro is in a very difficult phase for the coming years” because the Greek debt debacle had fueled speculation regarding eurozone cohesion.
Weak US economic data last week also showed that recovery in the world’s largest economy may not be as strong as early thought, triggering some flight from riskier assets such as stocks to the safety of the dollar.
“Risk aversion has finally hit the forex markets following another round of weaker US economic data,” said Kathy Lien, director of currency research at Global Forex Trading.
“The dollar rallied against higher yielding currencies as there are only so many disappointments the market can take before the optimism fades,” she said.
“We are getting more and more evidence that the US recovery is not as strong as previously thought, especially compared to other countries around the world,” she said.
In late New York trade, the dollar rose to 1.0260 Swiss francs from 1.0182.
The British pound fell to US$1.6260 from US$1.6332.
Asian currencies advanced last week, led by the Malaysian ringgit and the Thai baht, as improving regional economies attracted funds from abroad.
Investors put almost US$3 billion into equity and bond funds in developing nations in the week to Wednesday, following record inflows last year, Massachusetts-based fund tracker EPFR Global said.
The ringgit appreciated 1.1 percent to 3.3407 per dollar in Kuala Lumpur from a week ago, data compiled by Bloomberg showed.
The Thai baht gained 0.9 percent to 32.87 and the New Taiwan dollar climbed 0.2 percent to NT$31.828, approaching a 16-month high.
South Korea’s won completed a four-week rally, climbing 0.7 percent to 1,123.07 from 1,130.75 on Jan. 8.
It touched a 16-month high of 1,117.40 on Jan. 11.
The yuan rose for a second week on speculation that the central bank will allow currency appreciation to resume to stem inflation.
Twelve-month non-deliverable yuan contracts rose 0.2 percent in the week to 6.6135 per dollar, indicating brokerages are betting the currency will advance 3.2 percent from the spot rate of 6.8269 in the coming year.
TYPHOON: The storm’s path indicates a high possibility of Krathon making landfall in Pingtung County, depending on when the storm turns north, the CWA said Typhoon Krathon is strengthening and is more likely to make landfall in Taiwan, the Central Weather Administration (CWA) said in a forecast released yesterday afternoon. As of 2pm yesterday, the CWA’s updated sea warning for Krathon showed that the storm was about 430km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point. It was moving in west-northwest at 9kph, with maximum sustained winds of 119kph and gusts of up to 155kph, CWA data showed. Krathon is expected to move further west before turning north tomorrow, CWA forecaster Wu Wan-hua (伍婉華) said. The CWA’s latest forecast and other countries’ projections of the storm’s path indicate a higher
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
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