The euro fell for a second week against the US dollar after eight banks failed the EU stress tests and Ireland was downgraded by Moody’s Investors Service.
The US currency strengthened after a report showed US consumer prices excluding food and energy increased for a second month, cutting chances of additional stimulus from the Federal Reserve.
“They haven’t resolved the broader issues that have emerged and there will be question marks over the stress tests and the pressure on the euro in the near term is likely to downward more than up,” said Steven Englander, head of Group of 10 currency strategy at Citigroup Inc in New York. “The market has moved way beyond what they were assuming in the stress test.”
The euro traded US$1.4157 per dollar at 5pm in New York, down 0.8 percent from US$1.4265 on July 8. The yen strengthened 2.6 percent against the euro to ¥112.02, the biggest five-day gain since May 6. The US dollar weakened 1.9 percent to ¥79.13 from ¥80.64.
The European banks were found to have insufficient reserves to maintain a core tier 1 capital ratio of 5 percent in the event of an economic slowdown, the European Banking Authority said.
The assessments are the first by the European Banking Authority since it was set up earlier this year. Last year’s tests by its predecessor were criticized for not being tough enough because banks were shown to need only 3.5 billion euros more capital, a 10th of the lowest analyst estimate. Banks that fail the stress test must present a plan to raise more capital within three months.
The euro has fallen 1.5 percent in the past month against 10 developed-nation currencies, according to Bloomberg Correlation-Weighted Currency Indexes. The US dollar is down 1.4 percent and the yen is up 1.2 percent.
Moody’s Investors Service cut Ireland to “Ba1” from “Baa3” on Tuesday. The ratings agency cited the probability that the country, which received a bailout last year, would need additional official financing and for investors to share in losses before it could return to the private market to borrow.
The greenback rose against 10 of 16 major counterparts this week after US Federal Reserve Chairman Ben Bernanke told Congress on Friday that core inflation had moved higher – rising 0.3 percent for a second month last month — boosting speculation the central bank would not take further steps to support the US economy.
Sterling gained 1.2 percent this week to £0.8774 per euro. It reached £0.8749 on Tuesday, the strongest since June 16. The pound gained 0.6 percent to US$1.6158. It rose to US$1.6194 on Friday, the most since June 22. It lost 1.4 percent to ¥127.68.
The Australian dollar depreciated against all but one of 16 major peers tracked by Bloomberg, falling 0.7 percent against the greenback to A$1.0653, after Westpac Banking Corp became the first among the nation’s four biggest lenders to predict the central bank would cut interest rates in December.
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
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],”
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
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day