The NT dollar dropped to a seven-week low against the greenback amid concerns of a foreign capital outflow, dealers said.
Across the region, most Asian currencies also weakened against the US dollar as market watchers expected the US Federal Reserve to hold on to interest rates after lowering the federal funds rate to 2 percent from 5.25 percent in mid-September to stave off inflation, they said.
At its close in Taipei trading, the NT dollar dropped NT$0.303, or 1 percent, to NT$30.824 —the lowest since March 17, when the local currency closed at NT$30.850 against the greenback, Taipei Forex Inc’s tallies showed.
PHOTO: FANG PIN-CHAO, TAIPEI TIMES
Turnover hit US$3.083 billion at Taipei Forex Inc yesterday, up nearly 1.8 times from US$1.138 billion on Wednesday. Including turnover at the smaller Yuantai Foreign Exchange Inc, total transactions reached US$3.839 billion in Taipei trading yesterday, the second-highest after the US$3.932 billion recorded on Jan. 15.
“The NT dollar is likely to continue its recent correction through May 20 when the new administration takes office, as foreign investors appear to be waiting for clearer policy moves to decide whether they want to bring in their funds,” a local currency trader, who requested anonymity, said by telephone yesterday.
Foreign institutional investors sold a net NT$14.57 billion in local shares yesterday, driving the benchmark TAIEX down 59.72 points, or 0.67 percent, to close at 8,866.62 on the Taiwan Stock Exchange.
For the first four days of the week, foreign investors offloaded a net NT$29.76 billion in local stocks, with trading restricted to a narrow range, the stock exchange’s tallies showed.
“Speculation that the Fed’s rate cuts may come to an end or that it may even turn around and raise rates to combat inflation have helped drive the NT dollar lower in line with other softening Asian currencies,” the trader said.
The South Korean won, the Malaysian ringgit, the Singaporean dollar, the Philippine peso, the Thai baht and the Chinese yuan all dropped to their recent lows in trading yesterday, as market players began to unwind their short positions on the US dollar, he said.
Another trader said there was also some short covering of US dollar non-deliverable forward (NDF) contracts after the discount on one-month offshore NDF contracts turned into a premium, indicating that the market was expecting the NT dollar to weaken against the greenback.
“The central bank has also entered the market and adjusted its US dollar position around the NT$30.4 to NT$30.5 level, which could mean it did not want to see the NT dollar rise through that level in the short term,” said the trader, who also preferred not to be named.
“Some exporters were too bearish on the US dollar and built too many short positions. Now they are forced to unwind those positions in light of a likely reversal in the US dollar’s downward trend,” he said.
The trader predicted that the NT dollar may trade between NT$30.93 and NT$30.95 prior to May 20. So far this year, the NT dollar has gained 4.99 percent against the greenback.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts