Non-deliverable forwards in the yuan strengthened for a third week after Asian officials pledged to increase currency flexibility and avoid competitive devaluations.
Finance ministers attending the APEC forum in Honolulu, Hawaii, said they were committed to moving “more rapidly” toward market-determined exchange rates.
US Treasury Secretary Timothy Geithner said on Thursday that China had acknowledged the importance of faster adjustments in the yuan and must continue to allow the currency to appreciate.
Economic data this week showed China’s export growth and inflation cooled.
“A stronger yuan today echoes what the leaders are pushing for at the APEC meeting,” said Daniel Chan, chief economist at BWC Capital Markets in Hong Kong. “The slowdown in exports means the room for [a] drastic yuan appreciation is very limited. I expect the yuan will strengthen at a gradual pace in the coming months under such a gloomy economic outlook.”
Twelve-month forwards advanced 0.1 percent and climbed 0.29 percent from a week ago to 6.3319 per US dollar as of 4:51pm in Hong Kong, a 0.16 percent premium to the onshore spot rate, according to data compiled by Bloomberg.
The yuan rose 0.06 percent to US$6.3424 in Shanghai, trimming this week’s loss to 0.05 percent, according to the China Foreign Exchange Trade System. The People’s Bank of China raised the reference rate by 0.02 percent to US$6.3317 yesterday. The currency is allowed to trade 0.5 percent either side of the central bank’s daily fixing.
China will push ahead with exchange-rate reform, Ministry of Foreign Affairs spokesman Hong Lei (洪磊) said at a regular press briefing in Beijing yesterday in response to comments made by Geithner.
“China’s commitment will be duly upheld,” Hong said.
Consumer prices in China rose 5.5 percent last month from a year earlier, compared with a 6.1 percent gain in September, the National Bureau of Statistics reported on Wednesday. Producer prices increased 5 percent, less than the 5.8 percent predicted by economists in a Bloomberg survey.
Overseas shipments climbed 15.9 percent last month, compared with 17.1 percent in September and the 16.1 percent median estimate in a separate survey.
The yuan gained 0.44 percent this week and 0.22 percent yesterday to US$6.3556 in offshore trading in Hong Kong.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is