Asian currencies mixed against dollar

Asian currencies ended the week mixed against the dollar after a major economic stimulus unveiled by Washington disappointed markets.

The Japanese yen held steady in the past week, supported by continued demand for the safe-haven currency amid renewed disappointment over the US economy.

The yen stood at 90.96 to the dollar, compared with 90.97 a week ago, as the dollar was weighed down after US Treasury Secretary Timothy Geithner disappointed markets by giving few details of the rescue plan for the financial sector, dealers said.

“Markets had been buoyed - perhaps excessively - by hope and expectation in the run up to his speech, but were disappointed by the lack of clarity,” said Sumitomo Trust & Banking analyst Saburo Matsumoto.

Traders were now waiting to see whether US President Barack Obama would get Congressional approval for a separate economic stimulus package, he said.

Japanese Finance Minister Shoichi Nakagawa met Geithner Friday for the first time on the sidelines of a meeting among financial chiefs from the Group of Seven powerful nations.

They agreed to fight protectionism, but Nakagawa told Japanese reporters that they did not discuss foreign exchange. The Australian dollar is expected to gain next week as the impact of the Australian government’s 42 billion dollar (28 billion US) stimulus package begins to kick in, dealers said. The Australian dollar closed on Friday at 65.77 US cents, up from the previous week’s close of 65.40 US cents.

CMC Markets foreign exchange dealer Tim Waterer said the Australian dollar was likely to benefit as traders viewed any moves to stimulate a struggling economy as positive.

“Any government that’s proactive, their currency is getting a boost,” he said.

The package includes spending of 28.8 billion Australian dollars on schools, housing and roads over four years, tax breaks for small businesses and cash handouts of 12.7 billion dollars to eligible workers, farmers and students.

The New Zealand dollar ended the week at 52.45 US cents, up from 51.03 the previous week. Investors were concerned about global stock market weakness and the effectiveness of US government policies in combating recession and that affected demand for the New Zealand dollar, dealers said.

Bank of New Zealand said international news would keep downward pressure on the exchange rate even though large downward movement had already occurred.

(AFP)