Dollar weakens against yen, emerging market currencies

TOKYO - Agence France-Presse

AFP photo

The dollar broadly weakened Dec. 25 as emerging market currencies got a boost from recovering oil prices, which eased fears about slumping demand and a faltering global economy.

Crude prices climbed on the back of a surprisingly big drop in US petroleum inventories, fuelling hopes that a sell-off in the commodity may be coming to an end.
 
The upbeat sentiment Friday pushed traders into currencies seen as a riskier bet, with the Taiwan dollar rising 0.3 percent, while the Indonesian rupiah and South Korean won both inched up 0.02 percent.
 
Higher-yielding -- and riskier -- emerging units have been hit hard this year on fears of a flight of capital to the US as dealers look for better, safer investments boosted by last week's Federal Reserve interest rate raise.
 
Against its major peers, the greenback weakened to a two-month low of 120.19 yen against 120.28 yen in New York, and 120.87 yen on Dec. 23.
 
The euro edged up to $1.0965 from $1.0964. It weakened to 131.73 yen from 131.87 yen in US trade.
 
Analysts, however, said the US unit would likely hold up in 2016.
 
"The dollar may end the year with a little pause but it's too early to declare the uptrend has reversed," Koji Fukaya, chief executive officer at Tokyo-based FPG Securities, told Bloomberg News.
 
"The dollar will remain solid through 2016 as interest rates rise with an improving economy."