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Economy in Brief

Will Pressure Be Put on Asian Currencies to Appreciate?
by Louise Curley February 9, 2004

In the immediate aftermath of the G7 Finance Minister's meeting last week, the dollar fell against the Euro and the UK pound. Early on February 9th, the euro was equal to $1.28 and the pound, $1.86.

The decline in the dollar that started in early 2002 has largely been relative to the euro, the pound and the Canadian and Australian dollars. In terms of the US dollar, the Chinese Yuan, the Hong Kong dollar and the Malaysian ringgit have been virtually unchanged. The Korean won, the Thai baht and the Taiwan dollar have been slightly more flexible, but their year over year changes have been small compared to those of the euro.

Reading between the lines of the communiqué released by the Finance Ministers, one suspects that the G7 may begin to exert pressure on Asian governments to appreciate their currencies.

Exchange Rates and Appreciation(+) Depreciation (-) Jan 04 Dec 03 Jan 03 Jan 02 M/M
 %
Y/Y 
%
2003 2002 2001
                   
Euro = $ 1.2452 1.2597 1.0739 0.8594 -1.15 15.95 20.64 17.80 -5.19
Yen per $ 105.84 107.15 119.96 134.06 1.21 13.34 10.35 -12.74 -10.66
UK pound =$ 1.8215 1.7842 1.6448 1.412 2.09 10.74 10.85 10.67 -2.75
Hong Kong $ per $ 7.78 7.76 7.80 7.79 -0.26 0.26 0.52 0.0 0.0
China yuan per $ 8.277 8.277 8.277 8.277 0.0 0.0 0.0 0.0 0.0
Korea won per $ 1174 1192 1165 1314 1.53 -0.77 -0.48 10.72 -3.54
Thailand baht per $ 39.25 39.63 42.72 44.05 0.97 8.97 9.01 2.41 -1.79
Singapore S$ =$ 1.69 1.70 1.74 1.84 0.32 2.72 2.13 8.00 -7.60
Taiwan $ per $ 33.39 33.99 34.61 34.99 1.80 3.65 2.09 0.86 -5.23
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