Asian central banks intervened heavily in the currency markets on Thursday to slow the slide of the US dollar amid growing concern about the potential impact on the regionâ??s export driven economies.Traders said most of the Asian central banks had been buying US dollars, with the Bank of Korea among the most active following a round of intervention by Seoul earlier in the week.
Other central banks identified by traders as significant buyers of US dollars included Thailand, Malaysia, Taiwan and Singapore, which is a frequent market participant because of its managed currency regime.
In Hong Kong, the Chinese territoryâ??s central bank said it had injected HK$8.525bn into the financial system to prevent the currency from rising beyond its fixed trading band against the US dollar.
The central bank intervention appeared to have been triggered by a fresh wave of dollar selling by investor concerns about weak consumer credit figures in the US. Upward pressure on Asian currencies increased as Australia released strong employment growth numbers only two days after becoming the first G20 central bank to raise interest rates since the beginning of the global financial crisis.
The dollar came under fresh pressure across the board on Thursday. The euro rose 0.4 per cent to $1.4745 against the US currency, while the yen rose 0.2 per cent to Y88.47. Against a basket of traded currencies the dollar fell 0.6 per cent to 76.008, close to the lowest level of the year.
