Asian currencies mostly higher against dollar

HONG KONG: Asian currencies ended the week mostly higher against the dollar after significant rallies in commodity and share prices.

JAPANESE YEN: The safe-haven yen lost ground against the dollar in the past week as rallies in share prices encouraged investors to take more risks.

But evidence of an improving global economic outlook also capped the dollar's upside against major currencies, dealers said.

The yen was at 94.83 to the dollar in New York late Friday, down from 94.17 a week earlier.

In Tokyo, the Japanese unit hit the week's local low of 95.17 to the dollar on Friday before rebounding to 94.83 as market players took profits on the greenback's gains.

"Almost all majors are getting a boost against the greenback as solid economic data out of Asia and Europe help to drive a positive tone in the forex market today," Sacha Tihanyi at Scotia Capital said in New York on Friday.

The yen has shifted lower in Tokyo after peaking at 93.40 on Wednesday following Federal Reserve chief Ben Bernanke's congressional testimony that the US economy was improving but not enough to warrant a shift in monetary policy.

Wall Street shares surged to the year's highest levels on Thursday, encouraged by earnings reports from key US firms such as Ford, 3M, and AT T that beat expectations, continuing a trend of positive surprises.

"The string of better-than-expected second-quarter results has led to increased speculation that the global recession is ending," Andy Douglass at PNC Bank said. "As has been the theme in the currency market since at least last fall, as risk appetite and equities go up the US dollar goes down."

On the other hand, Chuo Mitsui Trust Bank forex manager Yosuke Hosokawa said that because of the solid corporate reports "support for the dollar remains positive."

AUSTRALIAN DOLLAR: The Australian dollar staged a significant rally as commodities demand and prices improved on growing investor confidence, dealers said.

The Aussie closed Friday at 81.65 US cents, up more than two percent from 79.98 US cents a week earlier.

"The Australian dollar has rallied significantly this week," said IG Markets analyst Chris Weston. "With momentum on its side we could see it test the recent high of 82.63 US cents.

AMP Capital Investors economist Shane Oliver said positive news from the United States had buoyed investor confidence, which saw "commodity prices and growth-sensitive currencies like the Australian dollar strengthen."

Since the end of June base metals prices, a key driver of the commodities-based Aussie, had gained more than eight percent, while the US dollar index had fallen 1.6 percent, said ANZ economist Amber Rabinov.

"Taken together, these moves suggest the Australian dollar at 81.50 US cents is around fair value," Rabinov said.

The push above 80 US cents appeared to be running out of steam, she added, with attempts towards 82 US cents short-lived.

"(The Aussie) requires a positive market event to provide a significant boost higher," she said.

CHINESE YUAN: The yuan closed at 6.8310 to the dollar Friday, compared with Thursday's close of 6.8310 and a closing price of 6.8317 to the dollar the week before.

The central bank had set the yuan central parity rate at 6.8318 to the dollar Friday, compared with 6.8307 on Thursday.

The People's Bank of China allows a trading band of 0.5 percent on either side of the midpoint.

HONG KONG DOLLAR: The US-pegged Hong Kong unit ended the week at 7.750, little changed from 7.751 the week before.

INDONESIAN RUPIAH: The rupiah ended at 9,995 to the dollar, up from 10,185 the week before.

NEW ZEALAND DOLLAR: The New Zealand dollar finished local trading Friday at 65.52 US cents, up from 64.40 the previous week.

On Thursday, the kiwi hit a nine-month high of 66.26 US cents due to gains in the US equities markets, but it quickly fell away again.

Attention in the coming week will be on Thursday's review of local interest rates by the central bank, although it is expected to leave the official rate unchanged at 2.5 percent.

The central bank's main concern is that the stronger local currency could hamper the economic recovery, Westpac bank economists said.

PHILIPPINE PESO: The Philippine peso rose to 48.065 to the dollar on Friday afternoon from 48.070 to the dollar on July 17.

SINGAPOREAN DOLLAR: The dollar was at 1.4433 Singapore dollars from 1.4539 the week before.

SOUTH KOREAN WON: The won further strengthened over the week to close at 1,249.60 to the dollar, compared with 1,259.50 won a week earlier, as foreign investors continued buying local stocks.

But the currency ended slightly lower for a second consecutive day Friday amid fears that local financial authorities might intervene to curb the won's rise in order to prevent South Korean goods less attractive in overseas markets.

TAIWANESE DOLLAR: The Taiwan dollar stayed unchanged in the week to July 24 to close at 32.955 against the US dollar.

THAI BAHT: The baht rose against a weaker dollar over the past week amid capital inflows into the local bourse, a dealer said.

The baht closed Friday at 33.98-34.00 to the dollar compared to the previous week's close of 34.05-06.