The euro rose against a majority of its most-traded counterparts as an agreement on a second international bailout for Greece reduced investor concern the region’s debt crisis will worsen.
The 17-nation currency reached a three-month high against the yen this week and broke through key technical levels against its Japanese and US peers.
The US dollar dropped against its higher-yielding counterparts as reports showed an improving economic recovery, dampening demand for safety.
Currencies of commodity-exporting countries rallied as oil surged and volatility fell to a three-year low. The European Central Bank (ECB) will offer banks unlimited three-year loans next week.
“There was some optimism following the Greek deal and optimism ahead of next week’s second liquidity tender by the ECB,” said Omer Esiner, chief market analyst in Washington at Commonwealth Foreign Exchange Inc. “The euro is rallying and all gauges of risk appetite are pointing to a risk-on week, whether it’s the Australian dollar, the New Zealand dollar, crude oil or the [US] dollar being down.”
The euro rose 2.3 percent to US$1.3448, reaching US$1.3487, the highest level since Dec. 2. It rallied 4.4 percent to ￥109.18, reaching ￥109.25 on Friday for the first time since Oct. 31. The yen weakened 2.1 percent to ￥81.20 per US dollar and touched ￥81.22, the weakest level since July.
The implied volatility of three-month options on G7 currencies as tracked by the JPMorgan G7 Volatility Index fell to 9.71 percent on Friday, the least since Aug. 8, 2008, as options traders scaled back the risk of large exchange-rate swings. Lower volatility makes investments in currencies with higher benchmark rates more attractive because the risk in such trades is that market moves will erase profits.
The Swiss franc led gains against the US dollar among the 16 most-traded currencies tracked by Bloomberg. The currency appreciated 2.6 percent to SF0.8960 against the greenback and gained 0.3 percent to SF1.2051 per euro.
Meanwhile, the pound fell the most in eight months versus the euro this week as Bank of England (BOE) minutes showed two policymakers voted for a larger increase in asset purchases than agreed at this month’s meeting.
Gilts advanced after Bank of England policymaker David Miles said he and Adam Posen voted to add ￡75 billion (US$119 billion) to the central bank’s stimulus plan because the economy is in a “precarious situation.” The Monetary Policy Committee finally agreed on a ￡50 billion increase. Sterling fell to a two-month low against the euro as a report confirmed Britian’s GDP shrank last quarter.
The pound depreciated 2.3 percent this week to ￡0.849 per euro at 4:11pm London time on Friday, the biggest weekly drop since June 3.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
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