The New Taiwan dollar and Philippine peso led gains in Asian currencies this week as China’s exports beat economists’ estimates, boding well for the regional economic recovery and trade.
The yuan rounded out its best week in a month after China’s trade surplus swelled to US$22.9 billion last month as exports and imports surged to records. Malaysia’s ringgit rose for a second week, its best winning streak in two months, after reports showed overseas shipments and manufacturing grew more than analysts had predicted.
“China’s export surprise will mean strong demand for products made in the rest of Asia,” said Julie Yu, a Taipei-based -foreign-exchange trader at Shin Kong Commercial Bank (新光銀行). “Economic growth in the region will continue to support gains in Asian currencies.”
Taiwan’s dollar appreciated 0.5 percent to NT$30.585 against the greenback this week, the peso rose 0.5 percent to 43.675, the ringgit climbed 0.2 percent to 3.1345 and the yuan gained 0.12 percent to 6.6556, according to data compiled by Bloomberg.
The NT dollar advanced for a second week after the government reported on Tuesday that exports increased a better-than-forecast 21.8 percent last month from a year earlier. Consumer prices rose 1.53 percent, the fastest in nine months, data the day before showed.
Global funds bought a total of US$1.3 billion more stocks than they sold in Taiwan, Indonesia, South Korea and Thailand this week, exchange data show. The IMF predicts Asia’s developing economies will expand 9.4 percent this year, while advanced economies will grow 2.7 percent.
South Korea’s won fell 0.4 percent for the week to 1,143.60 per US dollar and Indonesia’s rupiah dropped 0.1 percent to 9,018. India’s rupee was little changed at 45.11 and the Thai baht traded at 30.08 from 30.05 a week earlier.
The US dollar rose the most since September against the euro this week after an agreement to extend and expand tax cuts fueled speculation the US economy will accelerate, driving stocks and Treasury yields higher and boosting demand for greenback-denominated assets.
The US currency strengthened against most of its major counterparts this week as reports showed claims for jobless benefits decreased, exports swelled to a two-year high and consumer sentiment climbed. The euro fell against the greenback after Ireland’s credit rating was downgraded and the region’s political leaders differed about how to contain the debt crisis. The US Federal Reserve holds a policy meeting next week as it continues to buy Treasuries to bolster the economy.
The dollar rose 1.4 percent to US$1.3226 per euro, from US$1.3414 on Dec. 3. It touched US$1.3165 per euro on Thursday, the strongest since Dec. 2. The US currency added 1.7 percent to ¥83.95, from ¥82.53 last week. The euro added 0.3 percent to ¥111.04 from ¥110.73.
The pound gained 1.6 percent this week, and traded at £0.8371 per euro on Friday. It was little changed in the week, trading at US$1.5793.
Sterling has gained 0.2 percent in the past month, according to Bloomberg Correlation-Weighted Currency Indexes, which track a basket of 10 developed-country currencies. Since the end of last year, Britain’s currency has lost 3.7 percent, compared with a 9.5 percent decline by the euro.
The pound outperformed the 16-nation euro as the region’s debt crisis boosted demand for UK assets as a haven. The Bank of England this week kept its benchmark interest rate steady at 0.5 percent and held its asset-purchase program unchanged at £200 billion.
“There’s more gloom elsewhere,” said Chris Furness, head of foreign exchange strategy at 4Cast Ltd in London.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure