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Last week the euro outperformed the dollar, rising 0.1% to $1.4369 and losing what analysts described as the “ugly contest” for the title of the world’s least favoured currency.
The single currency was under pressure as by concerns on EU debt crisis as an international rating agency Standard & Poor’s lowered Greece’s credit rating to CC from CCC with negative outlook, agency Moody's placed Spain's AA2 credit rating under review for a possible downgrade and Italy had to pay elevated yields at a government bond auction.
The Swiss franc rose to record levels amid concerns the agreement on raising the US national debt may not be reached by August 2.
But on Friday the frank’s advance was curbed after Swiss central bank saw its first-half loss nearly quadruple from a year earlier on the declining value of its international reserves.
The Swiss franc hit a series of record highs against the dollar, climbing 3.5% to SFr0.7894 over the week.
The yen, another save-heaven currency, gained by 1.8% to Y77.14, its strongest level since Tokyo intervened to counteract strength in its currency in March. This fact have negative impact on export-aimed economy of Japan.
The Australian and New Zealand dollars also rose to record highs. The Australian dollar hit a 29-year high of $1.1080 against the dollar, while the New Zealand dollar reached a 30-year peak of $0.8670.
The kiwi rose toward a record high after the central bank said it will likely remove the half-percentage-point “insurance” cut in the target lending rate made after a February earthquake. But its rise was curbed as Reserve Bank Governor Alan Bollard signaled that strength of New Zealand’ dollar may reduce the extent of rate increases.
The Canadian dollar also moved against the dollar to highest level over the last three years at C$0.9403. The loonie received support on speculation the nation’s central bank will raise interest rates at least once this year.
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