The dollar fell for a third day this week, tracking a decline in stocks, on concern a sluggish economic rebound will drive investors away from US investments.
Weaker-than-expected economic reports in past weeks have led analysts in the Blue Chip Economic Indicators survey to lower forecasts for US growth, underscoring the decreased allure of stocks and bonds and the dollars to pay for them, investors said.
"Dollars that were flying into the US now are staying home," said Joseph Portera, head of fixed income at Mackay Shields Financial Corp, which manages US$32.5 billion.
The dollar fell to ?127.64 per dollar from ?128.33 late on Friday and to US$0.9139 per euro from US$0.9093. While the dollar advanced for the first week in six against the euro, rising 0.4 percent, it is less than a cent from a seven-month low of US$0.9190 reached Tuesday. The US currency gained against the yen for the first week in four, also climbing 0.4 percent.
Growth in the world's largest economy will subside from its 5.8 percent annualized rate in the January-March period to a 3.1 percent rate in the second quarter, according to the consensus forecast of 51 economists in the May Blue Chip survey.
That will narrow the difference with growth in the 12-nation Euro region, which the European Commission projects will be between 0.4 percent and 0.7 percent in the second quarter.
So far this quarter the dollar has dropped 4.7 percent against the euro and 3.9 percent against the yen, driven down in part as investors sold US stocks. The NASDAQ Composite Index has slumped 13 percent in the period while the Standard & Poor's 500 Index charted its seventh weekly drop in eight.
Traders expect "dollar strength is going to be abating, coupled with US asset markets," said Scott Schultz, a currency trader at Brown Brothers Harriman & Co. "There's not a lot of good news surrounding the dollar, and likewise the stock market."
More signs of economic weakness may prompt further losses in stocks, hurting the dollar, investors said. The Federal Reserve left its interest-rate target at a 40-year low of 1.75 percent Tuesday, saying a sustainable recovery is "still uncertain."
"The market is finally realizing the dollar won't be the strongest currency in coming months," said Murray Gunn, foreign-exchange investment director at Standard Life Investments in Edinburgh, Scotland, where he helps manage ?78 billion (US$114 billion). The euro may reach US$0.94 in the next two months, Gunn said.
The dollar failed to gain ground after the government said US producer prices unexpectedly fell in April, following a 1 percent climb in March. Producer prices declined 0.2 percent last month, compared with forecasts of a 0.4 percent rise, easing concerns inflation will accelerate.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last