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Saturday 22nd of August 2009
June 13, 2006

Emerging currencies fall versus greenback


by Elaine Frei

In currency markets on Tuesday, the Japanese yen was down against major currencies as analysts said that recent declines in equities markets there could cause the Bank of Japan to put off its plans to begin raising interest rates. Also helping the yen down were worries concerning the upcoming Tankan survey of business sentiment and whether foreign investors will continue their current sell-off of Japanese stocks.

The yen was down 0.6 percent versus both the US dollar and the euro, to ¥115.06 and ¥144.77 respectively, while it dropped 0.5 percent in relation to sterling, to ¥211.73.

Analysts’ opinions are divided as to whether the current rally by the US dollar will continue. Some believe it may be slowing down, but others believe that US interest rates will continue to rise, which will provide incentive for further gains by the greenback. The US currency was up slightly against the euro, to $1.2582. It also rose slightly versus sterling, to $1.8399.

Currencies in the emerging markets were generally down in relation to the US dollar. The Turkish lira hit a three-year low against the greenback as it declined by 2.8 percent to TL1.5962. The New Zealand dollar dropped 1 percent to the greenback, to $0.6223, while the Indonesian rupiah declined 0.8 percent to Rp9,485 to the dollar and the South Korean won lost 0.5 percent to Won961.3.

Declining metals prices caused some currencies to decline. The Chilean peso was 0.6 percent lower at 546 pesos to the dollar on falling copper prices, while lower gold prices sent the South African rand down 1.1 percent to R6.825.

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