(ATF) – In Asian trading Thursday, the DXY – an index that measures the value of the US dollar against a basket of currencies – jumped yet again, to above 102, an increase of 0.50%.
The cause, as in previous days: acute dollar shortages as central bank liquidity-creation measures failed to catch up with dollar demand.
Some minor Asian currencies, such as the Indonesian rupiah (IDR) weakened to more than 15,000 to the dollar, levels not seen since the Asian Financial Crisis of 1997-1998.
The Aussie dollar (AUD) lost 3%. Even the traditional safe-haven Japanese yen (JPY) fell as much as 1.4%.
The Chinese yuan (CNY) did not totally escape the downdraft as the USD fetched 7.09 yuan, up 0.60%. But that continues to be an exceptional showing for the Chinese currency and reflects the ongoing success of China in bringing manufacturing capacity back on line.
And that’s very good news for foreign investors in the world’s highest-yielding bond market: as yuan stability establishes itself, the need for pricey currency hedges remains limited.