Asian currencies reach lows versus US dollar

Asian currencies reach lows versus US dollar

Story link: Asian currencies reach lows versus US dollar

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Economic data out of the eurozone on Tuesday were euro-positive, but did not help the euro much in practical terms. September’s eurozone inflation rate was revised upward to 2.6 percent. Meanwhile, the ZEW business survey reported only a small increase in expectations, indicating that the German recovery is fragile.

In the UK, consumer prices were up by 2.5 percent in September, below expectations, which kept sterling under pressure.

The US dollar was supported by data on Treasury International Capital (TICs) flows which showed that foreign purchases of long-term securities was $91.3 billion in August, up from $87.5 billion in July and well above expectations. Figures also showed that foreign investors purchased $24.9 billion in Treasury bonds and $38.1 billion in corporate bonds in August. In addition, both headline and core Producer Price Index figures were up more than expected in September, suggesting that inflation rates will rise, as will interest rates.

The euro sat at ¥138.05 in relation to the yen.

Sterling fell 0.2 percent to $1.7493 versus the US dollar, but rose 0.3 percent to £0.6827 against the euro.

The US was up 0.6 percent to ¥115.66 against yen, a 2-year high, while it rose 0.8 percent to SFr1.2019 versus the Swiss franc.

Asian currencies were at lows against the greenback as well. The South Korean won hit a three month low of 1,052.7 versus the US dollar, and the Taiwan dollar and the Indian rupee both were at 11 month lows against the US currency. The Taiwan dollar sat at T$33.554 against the US dollar, while the rupee was down to an eleven-month low of Rs45.15 before recovering to Rs45.10 when state banks sold dollars to support the Indian currency.

Elsewhere, the New Zealand dollar hit an eight-year high of ¥80.30 versus the yen, at least partly due to the issue by New Zealand of yen-dominated uridashi bonds, targeted at Japanese investors interested in higher yields.