Baht What up with Dat?????

[bumper]

Bloomberg ticker showing 34.79 to the dollar a few minutes ago.

No in reality not a funny thing at all. But predictions in times where things change in Mins. You can't take much to the bank

On the local news they interviewed the new F/M as to the Viet Dong. His mind set at the moment is definitely not to devaule the Baht.

One comment he made bothered me a bit, his statement although products will be cheaper from Vietnam the qaulity will not be a good as Thailands

Beyond saying I have seem some Vietnam's wood working and it is excellent. I have actually seen it at OTOP several times and the vendors were rather proud that it was produced in Vietnam.

But, the real bother is this the right view in todays world?

We have already seen that th F/M really has very little to do with setting baht value that comes from the BOT.

I hope they don't let pride try to lead them through this crisis rather then good business practices.

I'm going to take a Forrest Gump moment now probably not wise to say anymore.

[Arnold.J.Lane]

the pound is just over 49 to the baht now.what a fall from 72.how low do you think it will go ?

[mortiboy]

Welcome to the forum AJ! Its anybodies guess1 I dont know about 72.Last November it as 68.Still a big drop.Imagine. All the farangs bank accounts depreciating almost by the day.The total loss must be tremendous What are they up to?Nobody seems to have clear answer.

[Arnold.J.Lane]

Last time I was over here was March 2007 and I think it was around 72 then.
Xmas Eve at the Kasikorn in the mall the rate was something like 49.66.
Thats a 30% decrease.Makes a big change to the budget.Stay at cheaper hotels and drink one or two less beers a day.Must be very difficult for some of you expats living here now.

[wazza]

Tongs Bar recently upped the prices of Beers to 90 baht,

Last week he was complaining that expats were arriving later than usual (0000 -0030 ) and only staying 1 hour.

My reply was " well u can get 3 San Miguel beers in soi farang for 180 baht and only 2 here for the same price, so they will stay longer at the other bars and move to Tongs once Soi Farnag is closed"

Didnt try to explain about the exchange rates , bit late in the night for that conversation.

[bumper]

Interesting baht actually hit 35 on the Bloomberg Ticker today

[aznyron]

Git maybe some good news will follow after the Christmas week end and the market opens up on Monday morning. I know BHO is no miracle man but just maybe confidence will come back in the USD after he is inaugurated and we will see a stronger USD let us all pray [-o< [-o< [-o< [-o< [-o< [-o<

[bumper]

Now the Bot says everything is rosey and only the poor will be hurt. No wonder there is such an argument going on. Might be a good idea hese days to engage the brian before activating the mouth. (TT)

Asian Currencies Drop This Week, Led by Rupiah, on Export Woes
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By Kim Kyoungwha

Dec. 26 (Bloomberg) -- Asian currencies, led by the Indonesian rupiah, fell this week on concern the global economic slump will deepen, eroding demand for the region’s exports.

The rupiah slumped the most among the 10 actively traded Asian currencies and Thailand’s baht posted its biggest weekly loss since June. A government report today showed Japan’s industrial production fell the most in 55 years in November after a record drop in exports.

“While we are not calling for a structural collapse in Asian currencies, we think sentiment and further macroeconomic weakness are likely to continue to weigh on them for now,” said Nizam Idris, a currency strategist with UBS AG in Singapore. “Trading will remain slow until early 2009.”

The rupiah slid 1.4 percent this week to 11,100 to the dollar as of 1:30 p.m. in Jakarta. It slumped 15 percent this year, its biggest annual decline since 2000, as the credit- market freeze prompted global funds to cut holdings in the region. The baht weakened 1.3 percent on the week to 34.97.

Japan’s factory output tumbled 8.1 percent last month from October, when it dropped 3.1 percent, the Trade Ministry said today in Tokyo. Companies surveyed by the ministry planned to reduce output a further 8 percent this month. The MSCI Asia Pacific Index of regional shares fell 45 percent this year, the worst in its two-decade history.

‘Very Gloomy’

The yen headed for its first weekly decline against the dollar in two months after the output data. The yen was on course for a third weekly decline versus the euro as Bank of Japan policy board member Hidetoshi Kamezaki said the central bank may consider “extraordinary steps” to improve funding for companies and influence longer-term borrowing costs.

The yen traded at 90.42 per dollar in Tokyo from 90.38 late yesterday in New York. It fell to 90.99 on Dec. 23, the lowest since Dec. 15. Against the euro, it was at 126.96 from 126.67.

Malaysia’s ringgit fell 0.3 percent this week, extending this year’s drop to 4.9 percent, compared with a 29 percent loss in South Korea’s won and a drop of 18 percent in India’s rupee, the worst performers in Asia this year.

“We’re going to see a very gloomy and grim economic situation in Asia including Malaysia” into next year, said Tetsuo Yoshikoshi, a senior economist at Sumitomo Mitsui Banking Corp. in Singapore. “That would prompt investors to sell Asian currencies including the Malaysian ringgit.”

The ringgit traded at 3.4827 against the dollar in Kuala Lumpur, according to data compiled by Bloomberg. It reached 3.6474 on Dec. 5, the lowest level since November 2006.

In Thailand, Prime Minister Abhisit Vejjajiva said the government will spend 300 billion baht ($8.6 billion), or about 3 percent of gross domestic product, to help counter a slump in Southeast Asia’s second-largest economy. The Thai economy may contract in the first quarter after declining between 2 percent and 3 percent this quarter, according to the finance ministry. Vietnam Devaluation

The Vietnamese dong fell by the most this week in a decade after the State Bank of Vietnam devalued the currency by 3 percent to help spur exports.

Policy makers are relying on a weaker currency to help boost shipments of the nation’s garments and coffee as a government report Dec. 24 showed the Southeast Asian economy expanded in 2008 at the slowest pace in nine years.

The dong weakened 2.5 percent this week to 17,425 versus the dollar in Hanoi, as the central bank fixed the daily reference rate for dong trading at 16,987 a dollar today, according to its Web site, after lowering it by 3 percent yesterday to 16,989.

The Korean won limited this week’s loss to 0.7 percent on speculation officials are buying the currency to reduce foreign- exchange losses as companies close their books for the year.

The government is seeking to ensure that the economy keeps growing next year even though many countries in Asia are headed for recessions, President Lee Myung Bak said over the weekend. The currency is set for its worst annual drop since 1997.

“The government’s intention to manage the year-end exchange rate below 1,300 appears to be a determined one,” said Kim Sung Soon, a currency dealer with Industrial Bank of Korea in Seoul. The won traded at 1,299, compared with 1,290 a week ago, according to Seoul Money Brokerage Services Ltd.

Taiwan’s dollar fell 1.5 percent this week to NT$33.028 against the U.S. dollar, the most in two months, and the Chinese yuan was quoted at 6.8450 a dollar in Shanghai, versus 6.8465 a week earlier, according to the China Foreign Exchange Trade System. Financial markets in the Philippines are closed for a public holiday.

To contact the reporters on this story: Kim Kyoungwha in Beijing at kkim19@bloomberg.net.

Last Updated: December 26, 2008 02:22 EST

[aznyron]

Git it more smoke & mirrors pride and stupid decisions will only escalate the problem now all we have to do is wait bring in as little money as possible tighten our belts in the spending department and watch and
see what happens. now a good time to pay down all my credit cards this way I have no money to bring it
and as for the 40K a month I am suppose to bring in I will only bring in what is needed and cross that bridge in August Happy New Year
PS I want to say the baht is holding at 34.60 so it might get weaker on tuesday morning when the market closes monday evening since they will not weaken it over the long week end they will wait and see what happens in the USA

[bumper]

Well the first step in what I believe will be a long journey.

Thai Baht Falls as Protesters Force Premier to Postpone Speech
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By Shanthy Nambiar

Dec. 29 (Bloomberg) -- Thailand’s baht fell to the lowest in almost two weeks after thousands of protesters blocked entrances to Parliament, prompting Prime Minister Abhisit Vejjajiva to postpone his inaugural address today.

The currency dropped to the weakest since Dec. 12 on concern renewed political unrest will hamper government efforts to prevent a recession. The finance ministry last week said that the economy may shrink this quarter and in the first three months of 2009, and announced plans to increase spending.

“The focus is on political uncertainty,” said Apichart Suratanasurang, a foreign-exchange trader at BankThai Pcl in Bangkok. “We have to see how the demonstrations pan out. If there is more violence, then it will adversely affect the market.”

The baht dropped 0.2 percent to 35.07 per dollar as of 11:29 a.m. in Bangkok, according to data compiled by Bloomberg. The currency earlier touched 35.08, the weakest since Dec. 12. It may fall to 35.20 this week, Apichart said.

Thousands of red-shirted protesters loyal to ousted premier Thaksin Shinawatra called today’s blockade to try to force Abhisit to call a snap election, extending months of political turmoil that has slowed economic growth. Abhisit this month became Thailand’s fourth prime minister of 2008.

“This doesn’t look good for Thailand,” said Korawut Leenabanchong, a fund manager who helps oversee 70 billion baht ($2 billion) at Bangkok-based UOB Asset Management. “The country has been dogged by political risk for two years. It will continue to be a main factor going forward.”

Spending Plans

Abhisit said on Dec. 26 the government will spend 300 billion baht ($8.6 billion), or about 3 percent of gross domestic product, to help counter a slump in Southeast Asia’s second-largest economy.

The economy will contract 2 percent to 3 percent this quarter and may shrink in the three months to March, Finance Ministry spokesman Somchai Sujjapongse said last week. The technical definition of a recession is for the economy to shrink two straight quarters.

“Everyone foresees the next year as bad for the global economy,” Apichart said “Thailand depends on exports and tourism. The economy probably won’t recover until the second half of next year.”

Exports in November contracted the most in 17 years as a global slump crimped demand, and months of anti-government protests and a seizure of Bangkok’s main airports disrupted tourism and shipments.

To contact the reporter on this story: Shanthy Nambiar in Bangkok at o snambiar1@bloomberg.net.

Last Updated: December 28, 2008 23:34 EST

[aznyron]

“Everyone foresees the next year as bad for the global economy,” Apichart said “Thailand depends on exports and tourism. The economy probably won’t recover until the second half of next year.”

Git they depend on tourism & exports well they killed both of them with the in flatted baht
I don't see how they are going to survive this crisis much longer unless they devalue the baht
which btw will hurt many expats who deposited 800 baht in thai bank for there retirement visa
if I was one of them I would pull it and buy my home country currency any way let see what tomorrow morning brings us Happy New Year and to the families as well

[aznyron]

well when I got up this morning it was 34.66 (bkk) now it 34.42 (scb) I now think we all agree that Thailand is manipulating the baht so they can fill there pockets as long as they can keep up this game

[bumper]

SCB now 34.72

Bloomberg to ticker 34.88

Yes Ron it is being manipulated. now if you had watched what the new PM said this should be no surprise. To what end I wont comment on.

I willsay this it si their money they soudl spend it the best they see fit. That being said it is not a never ending supply. In the end I doubt that this is going to make much benefit to them.

Although the approach is to show a face of confidence and everything is fine. It is not and that is what you see in the World News says, not how rosey thing are here. My guess ( just that nothing more) is they feel they can attract investors by showing everything is OK.

It's up to them don't see they are really taking this seriously yet, it might be the government can't hold a meeting and get things done. So prop it up hoping fopr the best later. Haven't checked the local news today to see if the Parliment actually had a meeting.

In the end the states and everyone else had to pay the band it will be no different here.

[bumper]

Ok another part of the puzzle, so seeing what your seeing at the moment should be expected. Don't look for it to last. That fat Lady hasen't sung yet as a matter of fact she is not even in the house yet. Remember there is knee jerk reactiosn to all the things going on. If you look at just one day or one thing your going to drive yourself nuts. Patience my man

Abhisit government starts deliver policy statement
By The Nation


Government of Prime Minister Abhisit Vejjajiva started delivering policy statement at Foreign Ministry on Tuesday at 11.10am.
The venue of the parliamentary session to deliver the policy statements was moved from the parliament to the foreign ministry after red shirt protesters blocked parliament for the second day on Tuesday.

The delivery started as red shirt protesters moved from parliament to the ministry. Hundreds of police were deployed along the ministry's fences.

The protesters, who are loyal to fugitive ex-Thai premier Thaksin Shinawatra, demanded that Abhisit dissolved the House and general election be held.

Abhisit government is required by the constitution to deliver policy statements within 15 days after they sworn in. It has until January 7 to deliver the statements.

The state-run NBT TV station broadcast the session.

[bumper]

PARLIAMENT
Red shirts prevent House from sitting
By Pravit Rojanaphruk
The Nation
Published on December 30, 2008



Democrats unable to read policy statement
Thousands of red-shirt pro-Thaksin Shinawatra members of the Democratic Alliance Against Dictatorship (DAAD) began what may be a long siege, blocking entry to parliament yesterday and preventing the new Abhisit Vejjajiva administration from delivering its policy statement.


The group marched from Sanam Luang to the front of parliament late Sunday night. It was lead by DAAD leaders like Jatuporn Promphan and Veera Musikaphong.


The group called for the House to be dissolved immediately and an election staged. They claimed the new government was illegitimate because the Army helped lure some former pro-Thaksin MPs into the Democrat Party.


Shortly after 2pm yesterday, large speakers and canvass tents were being set up around the front and side of Parliament as some 3,000 protesters angrily shouted "Abhisit Get Out!" and "Thaksin Come Back!"


House Speaker Chai Chidchob postponed the House meeting three times yesterday, from 9.30am to 2pm, then 5pm, and then to 9.30am today.


DAAD protest leaders said they would allow Abhisit and other MPs to walk to enter the parliament but concerns over MPs safety meant no Democrat ruling-party MPs were willing to take the risk.


Some red-shirt protesters like 56-year-old Bua Tasena, a masseuse working in Bangkok's Pattanakarn district who originally migrate from Lampang province a decade ago, said she would stay until the House was dissolved.


"I want a return to democracy. We don't accept [the Abhisit government]. We don't love Abhisit as PM."


Anti-Thaksin People's Alliance for Democracy (PAD) co-ordinator Suriyasai Katasila urged the red-shirt protesters to give the new government a chance to administer the country first, however.


Banners criticising Abhisit, the military and PAD-linked foreign minister Kasit Piromya abound. "Military's slave government" one said. "We don't want Government of thieves" another said.


There were also pictures of Abhisit handing a bouquet of flowers to PAD leader Sondhi Limthongkul back in 2006 as a proof of the new PM's political connection.


Sombat Boon-nagmanong, a former coordinator of the Sept 19 Network Against Dictatorship who joined the red-shirt camp to oppose the 2007 military-sponsored constitution, wasn't at parliament but was at the rally at Sanam Luang on Sunday. He voiced disappointment yesterday at Abhisit's decision to be helped by the military to form a coalition government. Sombat said he felt the government should be able to deliver its policy statement first, though, so the public can make some decision about the new administration.


However, he said it was most likely the Abhisit administration would try to hang on for as long as possible and not return power to the people soon enough. The protest in front of parliament, Sombat said, was a sign that "things won't be easy" for the new government.


Already, new red bandannas with a message signalling a new round of political struggle and conflict is available in front of the besieged parliament at Bt20. It reads: "Operation Defeat the Hijacking Insurrectors, for Democracy".

[bumper]

Ron you starting to get the picture it took all of five MIns, to find all that out. Do your home work, or let yourself be driven nuts by yo yo numbers.

Now lets se if they can get out of the F/M offices. We still have a Government that can not use it's facilities, the only difference a different building. The world is watching. The policy statement is the beginning of a debate and all are not in favor of what has happend.

Venue of policy delivery statement changed to FM

Abhisit government decided to change venue of policy delivery from parliament to Foreign Ministry after negotiation with red shirt protesters who blocked all access to parliament since Monday failed.


Long convoy of minivans carrying Prime Minister Abhisit Vejjajiva, his cabinet members and MPs left Democrat Party headquarter and headed to Parliament. However they had to stop at the army club near parliament after the protesters did not allow the access.

After discussing with Defence Minister Prawit Wongsuwan there, Abhisit decided to change the venue of meeting to Foreign Ministry.

His government is scheduled to deliver policy statements at 9.30am. The session was delayed from yesterday after all access to parliament was blocked by red shirt protesters who wanted Abhisit to dissolve the House and have a general election.

The protesters are loyal to fugitive Thaksin Shinawatra, the premier ousted in a 2006 coup, who was convicted of corruption and sentenced in absentia to two years in prison.

PM's Office Minister Satit Wongnongtoey said the government intended to deliver a policy statement but this was prevented by protesters.

"Therefore the government has decided to move the venue to the foreign ministry, which is confirmed legal. We have already informed coalition partners and the meeting will start as soon as we have a quorum."

[bumper]

You know I'm not nor have ever been a politically motivated person. But to understand what is happening with the baht. You have to know what is happening in the country.

It's an interesting meeting to watch even if you don't understand Thai, becasue ministers arer falling asleep all over the place. Even more intresting is NBT is a government station, the opposition didn't go so those falling asleep are a part of the Domocratic Coalition. If I owned that station I darn sure wouldn't be showing my colleges falling asleep during an important speech. But then again maybe they have beem burning the midnight oil to get to this point.

I turned the TV on to the speech. As soon as I walked out the room the wife changed the TV to some comedy show. That should tell us what the real interest level is, to the citizens of Thailand. I don't think my watches simply because she has lost hope for any meaningful change.

Breakingnews » Breakingnews

UDD marches to Foreign Ministry
By: BangkokPost.com
Published: 30/12/2008 at 11:21 AM
A group of red-shirted United Front for Democracy against Dictatorship (UDD) protesters on Tuesday morning marched to rally in front of the Ministry of Foreign Affairs after the government decided to deliver its policy statement there.

Prime Minister Abhisit Vejjajiva and his cabinet changed the place to deliver to the policy statement to the Foreign Ministry after police did not succeed in dispersing the UDD demonstrators in front of the parliament.

Opposition chief whip Wittaya Buranasiri said the opposition MPs will not join the policy delivery session at the Foreign Ministry because they could not accept the relocation plan of the government. He said the ministry is not under the parliament as stated in the law. He also questioned House Speaker Chai Chidchob’s honour after allowing the government to relocate the session.

He said the opposition MPs planned to gather at the parliament because they believed the policy could still be announced there since no violent activities have taken place.

A group of seven senators, including Pol Col Sontaya Sangpao, said they would not join the session if it is being held at the Foreign Ministry.

Pol Col Sontaya considered that announcing the government policy outside the parliament would be unrighteous and disgraceful.

[Watson.]

From here, maybe baht just victim of global problems? Channel 4 tourist rates increase or decrease one year on pound. I'm off to Gambia!

Gambia dalasi + 1%
Brazil real - 1%
NZ dollar - 7%
Aus dollar -10%
Turkey lira - 10%
Canada dollar -12%
Sweden krona -12%
Poland zloty -20%
Euro -25%
Denmark krona -26%
Malaysia ringgit -27%
US dollar -28%
Egypt pound -28%
Thai baht -28%
Hong kong dollar -29%
Singapore dollar -30%
UAE dirham - 30%
Israel shekels -31%
Swiss franc -32%
China yuan -35%
Japan -40%

Scrub Gambia, Japan for me!!

[bumper]

Well UDD is supposed to go home now for the New Years parties and return. I think this move was wishful thinking long ways to go.

Thai Baht Rises, Paring 2008 Drop, on Premier’s Policy Address
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By Shanthy Nambiar

Dec. 30 (Bloomberg) -- Thailand’s baht advanced, snapping a seven-day slump, as anti-government protesters failed to prevent Prime Minister Abhisit Vejjajiva from delivering his inaugural policy address. Ten-year government bonds fell.

Abhisit, who spoke to lawmakers at the foreign ministry instead of Parliament because of demonstrations, said he plans to restore investor confidence as the nation faces an “economic crisis.” The bath has dropped 15 percent this year, the most since 1997, and the finance ministry last week said the economy may contract this quarter and in the first three months of 2009.

“People are probably glad he can give his speech and that after this the government can do its job and come up with the fiscal stimulus package,” said Paisarn Lertkowit, a foreign- exchange trader at Bangkok Bank Pcl, the country’s largest lender. “After it broke below 35, the baht started heading up. Flows are pretty thin.”

The baht rose 0.7 percent to 34.78 as of 5 p.m. in Bangkok, according to data compiled by Bloomberg. Thailand’s markets will be closed for the New Year holiday from tomorrow and won’t reopen until Jan. 5.

The currency gained today as exporters sold dollars, central bank Senior Director Pongpen Ruengvirayudh said today. The Bank of Thailand is “taking care” of the currency “from afar,” she said, without elaborating.

Thousands of red-shirted protesters loyal to ousted premier Thaksin Shinawatra blockaded the entrance to Parliament. Abhisit, who was voted by lawmakers into office this month, is the nation’s fourth leader since January and was yesterday forced to delay his policy address.

Abhisit said on Dec. 26 that the government will spend 300 billion baht ($8.6 billion) to help Southeast Asia’s second- largest economy counter a possible recession next year.

Annual Loss

The baht tumbled this year as political unrest and an economic slump kept overseas investors away. The benchmark SET Index of stocks posted a 47.6 percent annual drop and foreign investors had sold $4.9 billion more of Thai shares than they bought through Dec. 29, according to data compiled by Bloomberg.

“Political concerns and slowing growth are driving the baht lower,” said Carl Rajoo, an economist at Forecast Singapore Pte. “Everything is pointing to a slowdown in the economy. There is a huge rift in the nation.”

The economy may contract in the first three months of 2009 after shrinking between 2 percent and 3 percent this quarter, Finance Ministry spokesman Somchai Sujjapongse said last week. The technical definition of a recession is for the economy to shrink two straight quarters.

Ten-year government bonds fell. The yield on the 5.625 percent note due January 2019 rose two basis points to 2.70 percent, according to the Thai Bond Market Association.

Global Recession

The nation reported a current-account deficit in November for the fifth straight month as the global economic slowdown cooled exports, the central bank said today. Exports last month shrank 18.6 percent from a year earlier, the most in at least 17 years, official figures show.

The government expects 2.5 million fewer tourists this quarter and next as months of anti-government protests that forced the temporary closure of Bangkok’s main airports disrupted tourism.

The worst global financial crisis since the Great Depression will also hurt Thailand’s exports and tourist arrivals. The U.S., Europe and Japan are experiencing their first simultaneous recessions since World War II.

“Deterioration in the global economy is expected to prove worse than anticipated early next year,” said Tetsuo Yoshikoshi, a senior economist at Sumitomo Mitsui Banking Corp. in Singapore. “Prospects for the Thai economy are astoundingly weak in 2009. Any immediate resolution to the political turmoil can’t be expected. The baht will be one of the worst performers in the region in 2009.”

The currency may fall to 36.20 against the dollar by the end of June and to 37.90 by the end of 2009, Yoshikoshi said.

To contact the reporter on this story: Shanthy Nambiar in Bangkok at snambiar1@bloomberg.net.

Last Updated: December 30, 2008 05:21 EST

[bumper]

Boy reality bites no matter what direction it goes

If we are to see relief in the upcoming year, really looks like it will come from here not our home countries. No matter where you are we have tough times to go through. Hope this all comes to an end soon for all of us.

I have noticed myelf being totaly self absorbed in what the baht is doing not paying enough attention to the dollar.

I have kept this tread goign trying to see history later written by those who actually lived it rather then what some thinks about it. Twenty years for now.

2009 is going to be tough but we will survive it

Happy Holidays to all.

Dollar Heads for Biggest Annual Drop Against Yen in Two Decades
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By Ron Harui

Dec. 31 (Bloomberg) -- The dollar was set to complete its biggest annual decline against the yen in more than two decades on signs the U.S. economy is sinking deeper into recession.

The euro was poised for its best year against the British pound since its 1999 debut on speculation the Bank of England will keep its main lending rate lower than that of the European Central Bank. The Australian and New Zealand dollars had record slides versus the U.S. currency and the yen as a global economic slump dragged down prices of commodities the nations export and curbed demand for higher-yielding assets.

“The dollar is likely to weaken further into 2009,” said Norifumi Yoshida, vice president of the trading section in Singapore at Mizuho Corporate Bank Ltd., a unit of Japan’s second-largest bank by assets. “The U.S. recession will probably be prolonged as the data aren’t signaling any recovery at all.”

The dollar declined to 90.18 yen as of 7:10 a.m. in London from 90.34 yen in New York yesterday. It has fallen 19 percent this year, the most since 1987. The currency dropped to $1.4125 per euro from $1.4057, paring its 2008 gain to 3.3 percent.

The U.S. currency may weaken to 80 yen and $1.48 per euro by the end of 2009, Yoshida said. His forecast compares with median estimates of 100 yen and $1.26 per euro in a Bloomberg News survey of analysts. Currency movements this week may be exaggerated because of the New Year’s holidays in Japan from today through Jan. 2, he said.

The euro advanced to 97.73 British pence from 97.57 pence yesterday, when it reached a record 98.03 pence. It rose to 127.47 yen from 126.97 yen.

The yen was the best performer of 2008 among the world’s 16 most-active currencies against the dollar, while the pound was the worst, sliding 27 percent.

Near-Zero Rates

The U.S. Dollar Index traded on ICE futures in New York, which tracks the greenback against the currencies of six trading partners, fell this month after the Federal Reserve cut its benchmark interest rate to a range of zero to 0.25 percent for the first time and shifted its focus to debt purchases to revive the economy. Consumer confidence is the lowest in at least 41 years and a slide in property prices gathered pace in October, according to U.S. reports published yesterday.

“The U.S. reducing rates to near zero is having an impact,” said Gerrard Katz, head of foreign-exchange trading in Hong Kong at Standard Chartered Plc, a U.K. bank that gets most of its profit from Asia, in an interview with Bloomberg Television. “In the second half of 2009, we should see the dollar weaken.”

Bailouts

The U.S. government this year enacted a $700 billion Troubled Asset Relief Program and used half of those funds to help banks. The Treasury this week committed $6 billion to support GMAC LLC, the financing arm of General Motors Corp., widening the government’s effort to keep the largest U.S. automaker out of bankruptcy.

The Institute for Supply Management’s December factory index probably dropped to 35.4, the lowest reading in almost three decades, according to a Bloomberg News survey of economists. The report is due on Jan. 2.

The Standard & Poor’s 500 Index plunged 39 percent in 2008 as the economy deteriorated, poised for its worst year since 1931. U.S. Treasuries returned 14.9 percent, the most since 1995, according to Merrill Lynch & Co.’s U.S. Treasury Master index. The Dollar Index is set for a 5.1 percent advance.

“The data is still going to look quite poor,” said Besa Deda, chief economist at St. George Bank Ltd. in Sydney. “It’s negative for the dollar.”

Weaker Pound

The euro surged 33 percent against the pound in 2008, heading for its best year since the currency’s 1999 introduction, after the Bank of England reduced its benchmark interest rate by 3.5 percentage points this year to 2 percent to limit the fallout from the global financial crisis.

The ECB cut its benchmark to 2.5 percent, 1.5 percentage points lower than at the start of 2008, with some policy makers indicating they may be reluctant to lower borrowing costs again next month.

The Australian and New Zealand dollars completed the biggest annual declines against the dollar since they started trading freely in 1983 and 1985, respectively.

The currencies in 2008 reached their highest levels against the U.S. dollar in more than 20 years before sliding in tandem with commodities, which account for more than half the countries’ exports. Oil prices fell yesterday, contributing to the steepest annual drop in raw-materials costs in more than half a century, after the U.S. consumer confidence report.

Cheaper Commodities

“Commodity prices are off a bit after the weak consumer sentiment data in the U.S. refocused the market on the global slump,” said Adam Carr, a senior economist at ICAP Australia Ltd. in Sydney.

Australia’s dollar was at 69.34 U.S. cents and has slid 21 percent this year. New Zealand’s dollar traded at 57.95 cents and has tumbled 24 percent in 2008.

The Australian and New Zealand dollars have slid 36 percent and 39 percent, respectively, against the yen this year as a global economic slump and $1 trillion in credit-market losses prompted investors to cut so-called carry trades.

In a carry trade, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the two. The risk is that currency market moves erase those profits.

Australia’s benchmark rate is 4.25 percent and New Zealand’s rate is 5 percent, compared with 0.1 percent in Japan.

To contact the reporters on this story: Ron Harui in Singapore at rharui@bloomberg.net

Last Updated: December 31, 2008 02:23 EST