The US dollar faded on Friday as traders digging into reports on US retail sales and wholesale prices found soft conditions that could lead to an easier monetary stance from the Federal Reserve.
The euro rose to US$1.2139 at 10pm GMT from US$1.2033 in New York late on Thursday.
The US dollar drifted down to ?114.17 from ?114.32 on Thursday.
Traders looking beyond the headline figures on wholesale inflation and retail sales found signs of economic softening that may lead the Fed to ease its stand on interest rates.
US retail sales rose 0.7 percent last month, but just 0.2 percent excluding the automobile sector. Analysts had expected rises of 0.9 percent and 0.4 percent respectively.
A surge in energy costs pushed US producer prices -- an indicator of inflation at the wholesale level -- up 0.9 percent last month. But the core PPI index, excluding food and energy, rose only 0.1 percent. Economists had expected a 0.4-percent rise in the headline PPI and a 0.2-percent increase in the core rate.
The Fed has raised rates in its past 13 meetings, but analyst Richard Lee at Forex Capital Markets said: "The bond market interpreted the soft retail sales data as a bullish sign as policy makers may shift the current tightening cycle."
Paul Ashworth at Capital Economics noted that the headline rise in retail sales had been driven by volatile vehicle sales, while the headline PPI increase was mostly the result of rising petrol and food prices.
"The upshot is that there is nothing here to stop the Fed calling it a day once interest rates reach 4.5 percent," he said.
Analyst Daragh Maher at CALYON agreed. Although the figures will not alter expectations of the Federal Reserve hiking interest rates by another quarter point to 4.5 percent at the end of January, future data will need to be stronger to justify hikes beyond that, he said.
The US dollar had gained against the euro on Thursday and earlier on Friday. The euro dropped as low as US$1.2027 after the US published solid trade data on Thursday and European Central Bank president Jean-Claude Trichet failed to indicate a rate hike in February.
In late New York trade, the dollar stood at 1.2767 Swiss francs after SF1.2854 on Thursday.
The pound was being traded at US$1.7766 after US$1.7601 late on Thursday.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to