The US dollar slipped in Asian trade yesterday, while equity markets were muted after US President Barack Obama won a second term in a closely fought US presidential election.
The US currency fell against the euro and yen in afternoon trade, as dealers bet that under Obama, the US Federal Reserve would continue the loose monetary policy that has seen it flood markets with billions of US dollars.
The euro bought US$1.2860 in Tokyo, well up from US$1.2788 earlier yesterday and US$1.2814 in New York late on Tuesday. The greenback was at ¥80.20, compared with ¥80.34 in New York.
The euro bought ¥103.13, from ¥102.96 in New York.
The greenback was also broadly lower against other Asia-Pacific currencies: It fell to US$1.0466 from US$1.0432 against the Australian dollar, dropped to 1,084.60 South Korean won from 1,091.20 won, and slid to S$1.2209 from S$1.2240 against the Singaporean dollar.
Gold prices rose thanks to the weaker US dollar, rising to US$1,722.40 by 8:35am GMT, from US$1,679.75 late on Monday.
A clear victory had been the overriding hope, allowing the government to work to avert the “fiscal cliff,” which will dominate discussions in the US Congress between now and Christmas.
If Congress fails to agree how to cut spending over the medium term, there will be automatic deep spending cuts that could tip the US back into recession, in a major blow for the slowing global economy.
On equity markets, Sydney gained 0.71 percent, or 31.7 points, to end at 4,516.5. Tokyo was flat, nudging down 2.26 points to 8,972.89, while Seoul closed up 0.49 percent, or 9.38 points, at 1,937.55.
Hong Kong shares ended up 0.71 percent, or 155.42 points, at 22,099.85; Shanghai was flat, edging down 0.27 points to 2,105.73.
“Investors have been factoring in his win and adjusting their positions likewise,” said Kengo Suzuki, forex strategist at Mizuho Securities in Tokyo.
“The issue now is the uncertainty surrounding the US fiscal cliff, and how a divided Congress will deal with the issue,” he added.
SHK Financial strategist Daniel So told Dow Jones Newswires: “An Obama victory ensures the continuity of US monetary policy, which is likely to be kept loose.”
He added that a Romney win would likely have seen him “launch policies to incentivize fund flow back to the US, so in terms of liquidity inflow, an Obama win also favors the Asian markets.”
European stock markets were up early yesterday, as traders reacted to Obama’s convincing re-election and looked ahead to a key Greek vote on austerity.
In early deals, London’s FTSE 100 index of top companies edged up 0.1 percent to 5,889.98 points, Frankfurt’s DAX 30 added 0.43 percent to 7,409.61 points and in Paris the CAC 40 rose 0.62 percent to 3,500.18.
However, regional traders were still concerned about Europe’s debt woes after data on Tuesday showed a bigger-than-expected slump in factory orders in Germany, the eurozone’s biggest economy.
Berlin said industrial orders declined 3.3 percent in September from August after falling 0.8 percent the previous month.
That is much steeper than expected. Analysts polled by Dow Jones had been expecting a fall of 0.5 percent.
Greek lawmakers are due to vote later in the day on a new set of austerity measures — including tax hikes and pension cuts — that are needed to unlock the latest batch of international aid and stave off bankruptcy.
Eyes are also on the 18th congress of the Chinese Communist Party that begins today and which will see the country’s leaders for the next 10 years anointed.
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