Dollar soars: worth more than yen - Hawaii News Now - KGMB and KHNL

Dollar soars: worth more than yen

Source: MGN Online Source: MGN Online
HONOLULU (HawaiiNewsNow) -

Hawaii's international visitors are a little less rich as the U.S. dollar soars on world currency markets - for the first time in years it is worth more than the yen, the Australian dollar and the Canadian dollar.

Currencies fluctuate in relation to each other, but if this trend persists, it has economic ramifications for Hawaii, where visitors from Japan, Australia and Canada have lately enjoyed extra buying power after changing their money into U.S. dollars.

The dollar first broke 100 with the yen Thursday. By Friday morning the dollar was trading at 102 to the yen, parity with the Australian dollar, and a penny more than the Canadian dollar.

The exchange rate with the yen, at a four-year low, has changed the most. Last November the Australian and Canadian dollars were a little stronger but the yen was so strong that some days it took just 80 yen to buy a dollar. So Japanese visitors have lost a fifth of their buying power in Hawaii in less than half a year.

The weaker yen could strengthen the Japanese economy by making Japanese exports cheaper in the United States and Europe. In fact, there is so much expectation of this that the Bank of Korea this week adopted a policy of low interest rates, which will drive down the value of the Korean won. Australia and New Zealand previously joined the United States in cutting interest rates. Some economists predict interest rate intervention by more countries, like Canada, and a few analysts are openly calling it a currency war.

U.S. Treasury Secretary Jack Lew warned Japan not to provoke competitive devaluations. "We've made it clear we'll keep an eye on that," he said on CNBC.

The strong dollar has led to weaker commodity markets. Prices are down for gold - $1,427 an ounce Friday morning - silver, copper, oil and coffee.

In other economic news Friday, Federal Reserve Chairman Ben Bernanke announced that the Fed had broadened its oversight beyond banks and now also monitors the "shadow banking system" where loans are bundled into securities and resold to investors. Most mortgages are bundled and resold, and it was a crash in the value of mortgage-based securities that precipitated the market meltdown of 2008.

Copyright 2013 Hawaii News Now. All rights reserved. 

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