The weakened US dollar tumbled further on Friday on foreign exchange markets, sinking to another record low against the euro, as G7 finance chiefs met for talks in Washington.
The G7 finance ministers and central bank chiefs did not spell out a specific course of action. Rather, they sought to strike a confident tone that they are on top of the situation. Finance officials also said they will seek to learn the causes and lessons from the turmoil.
At 9pm GMT, the euro was swapping hands at US$1.4301, up from US$1.4297 late on Thursday. The euro had earlier surged to a record US$1.4319.
The dollar meanwhile fell sharply against the Japanese currency, dropping to ?114.53 from ?115.62 a day earlier.
The dollar has been undermined by mounting expectations that the US central bank will be again forced to cut borrowing costs.
The US Federal Reserve slashed its key interest rate last month by half a percentage point to 4.75 percent amid financial market turmoil and a lingering housing market downturn.
Lower borrowing costs in the US reduce interest in the dollar and boost the attractiveness of the euro.
US Treasury Secretary Henry Paulson has voiced confidence in a "strong dollar" in the past week, but the currency has declined sharply in the past year, falling by over 13 percent against the euro.
And many analysts expect the dollar's fortunes to dwindle further in coming weeks, but that could trigger thorny problems for policy makers in other countries, particuarly the eurozone where exporters are becoming concerned about the euro's strength.
Concerns are also mounting in the US that the dollar's fall could spark inflation risks for the world's largest economy as it makes foreign goods and products more expensive for Americans to buy.
The greenback's value also dipped against the Canadian dollar, as the Canadian currency climbed as high as US$1.0381, marking its highest level against the US dollar in 33 years, before settling at US$1.0345.
Some analysts said a coordinated action by the G7 was unlikely because the strength of the euro reflected the good health of the eurozone economies.
In late New York trading, the dollar stood at 1.1660 Swiss francs, down from SF1.1693. The pound rose to US$2.0514 from US$2.0444.
AI BOOST: Although Taiwan’s reliance on Chinese rare earth elements is limited, it could face indirect impacts from supply issues and price volatility, an economist said DBS Bank Ltd (星展銀行) has sharply raised its forecast for Taiwan’s economic growth this year to 5.6 percent, citing stronger-than-expected exports and investment linked to artificial intelligence (AI), as it said that the current momentum could peak soon. The acceleration of the global AI race has fueled a surge in Taiwan’s AI-related capital spending and exports of information and communications technology (ICT) products, which have been key drivers of growth this year. “We have revised our GDP forecast for Taiwan upward to 5.6 percent from 4 percent, an upgrade that mainly reflects stronger-than-expected AI-related exports and investment in the third
Mercuries Life Insurance Co (三商美邦人壽) shares surged to a seven-month high this week after local media reported that E.Sun Financial Holding Co (玉山金控) had outbid CTBC Financial Holding Co (中信金控) in the financially strained insurer’s ongoing sale process. Shares of the mid-sized life insurer climbed 5.8 percent this week to NT$6.72, extending a nearly 18 percent rally over the past month, as investors bet on the likelihood of an impending takeover. The final round of bidding closed on Thursday, marking a critical step in the 32-year-old insurer’s search for a buyer after years of struggling to meet capital adequacy requirements. Local media reports
TECHNOLOGICAL RIVALRY: The artificial intelligence chip competition among multiple players would likely intensify over the next two years, a Quanta official said Quanta Computer Inc (廣達), which makes servers and laptops on a contract basis, yesterday said its shipments of artificial intelligence (AI) servers powered by Nvidia Corp’s GB300 chips have increased steadily since last month, should surpass those of the GB200 models this quarter. The production of GB300 servers has gone much more smoothly than that of the GB200, with shipments projected to increase sharply next month, Quanta executive vice president Mike Yang (楊麒令) said on the sidelines of a technology forum in Taipei. While orders for GB200 servers gradually decrease, the production transition between the two server models has been
ASE Technology Holding Co (日月光投控), the world’s largest integrated circuit (IC) packaging and testing supplier, yesterday announced a strategic collaboration with Analog Devices Inc (ADI), coupled with the signing of a binding memorandum of understanding. Under the agreement, ASE intends to purchase 100 percent shares of Analog Devices Sdn Bhd and acquire its manufacturing facility in Penang, Malaysia, a press release showed. The ADI Penang facility is located in the prime industrial hub of Bayan Lepas, with an area of over 680,000 square feet, it said. In addition, the two sides intend to enter into a long-term supply agreement for ASE to
RSS