US dollar slightly stronger; Asian currencies lower

US dollar slightly stronger; Asian currencies lower

Story link: US dollar slightly stronger; Asian currencies lower

TAGS:

The US dollar gained 0.1 percent to $1.2056 in relation to the euro on Monday, and it was also up 0.1 percent to ¥112.26 versus the yen.

The dollar’s strength was based on a sense of relief that the damage caused by Hurricane Rita was less than many had feared it would be, and especially that the worst of the storm had stayed away from the largest concentration of US oil facilities in Texas. The positive sentiment toward the dollar was weakened to some extent, however, by comments made by US Federal Reserve chairman Alan Greenspan to French Finance Minister Thierry Breton, to the effect that the US has “lost control” of its budget deficit.

Sterling was up 0.1 percent to £0.6784 against the euro and was flat at $1.7771 in relation to the US dollar at midday in New York. The UK currency was at a 2-month low of $1.7705 versus the greenback earlier in the day on speculation that UK and US interest rates would be at the same level by the end of the year.

In Asia, meanwhile, several currencies weakened as investors began to return to US investments. The Singapore dollar lost 0.2 percent to S$1.6881 in relation to the US dollar, while the Thai bhat fell 0.3 percent to Bt41.23 and the Korean won was down 0.5 percent to Won1,035.4.

The Polish zloty fell 0.7 percent to 3.9119 zlotys to the euro after a general election in Poland on Sunday. While some analysts saw the PiS party’s victory as zloty-negative, others felt that while the election outcome was not wholly positive the zloty should rebound once disappointment over the election results subsides.