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Thursday 28th of August 2008
June 28, 2006

Emerging currencies mixed


by Elaine Frei

Some emerging currencies, which have been struggling recently, saw gains on Wednesday, while others continued to decline. Meanwhile, major currencies moved little in relation to one another as traders waited to see what the US Federal Reserve would do about interest rates later in the week.

The US dollar strengthened some as analysts expected the Fed to hike US rates by a quarter of a percentage point. The greenback was up 0.1 percent to ¥116.26 in relation to the Japanese yen, while it added 0.4 percent to $1.8171 versus sterling and was up 0.5 percent to $1.2533 against the euro.

The euro, meanwhile, also lost value in relation to sterling, falling 0.4 percent to £0.6897. The shared currency also dropped 0.1 percent versus the yen, to ¥145.7.

The Turkish lira added 1.2 percent in relation to both the US dollar and the euro, to TL1.6160 and TL2.2050 respectively after the nation’s central bank hiked its overnight lending rate another 200 basis points to 22.25 percent. However, it is still 18 percent lower than it was in April.

The South African rand also took back a portion of its recent losses as it was up 1.1 percent to R7.187 versus the US dollar. The rand was helped higher by growing inflation that boosted the chances of higher interest rates there soon.

The New Zealand dollar, the Hungarian forint, and the Icelandic krona, however, continued to lose value. The kiwi dropped over 2 percent to the US dollar, to a two-year low of $0.5933 after it was announced that New Zealand had a trade deficit in May for the first time in three months. The forint dropped 0.9 percent to Ft223.50, while the krona was down 0.4 percent to IKr76.18.

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