Asian currencies retreated from a 15-month high this week as US lawmakers struggled to agree on budget revisions needed to avert US$607 billion of automatic spending cuts and tax increases in the world’s biggest economy.
The Bloomberg-JPMorgan Asia Dollar Index, having gained in each of the past six months, halted its advance as Malaysia’s ringgit had its worst week since August.
US President Barack Obama on Wednesday said that the global economy remains “soft” and the deadlock in Washington over taxes and spending, the so-called “fiscal cliff,” is holding the US back from leading a strong recovery. The US Federal Reserve meets next week, when the central bank is forecast to increase its asset purchases.
The ringgit slid 0.6 percent this week to 3.0578 per US dollar in Kuala Lumpur, data compiled by Bloomberg show. China’s yuan was little changed this week at 6.2301 per US dollar, while Thailand’s baht and the New Taiwan dollar were steady at 30.68 and NT$29.125 respectively. South Korea’s won strengthened 0.1 percent to 1,081.55. Indonesia’s rupiah fell 0.7 percent to 9,658, the Philippine peso declined 0.1 percent to 40.933 and India’s rupee fell 0.4 percent to 54.4750.
The Asia Dollar Index, which tracks the region’s 10 most active currencies, excluding the yen, fell 0.1 percent. It reached 118.26 on Nov. 30, the highest since September last year.
Meanwhile, European Central Bank (ECB) President Mario Draghi said the eurozone’s economy will shrink 0.5 percent this year this year, while Germany’s central bank slashed its growth estimate for next year to 0.4 percent from 1.6 percent predicted in June.
“Draghi’s words mean the recovery will be slower than previously expected, damping exports to Europe,” said Chong Wee-khoon (張偉勤) of Societe Generale SA in Hong Kong. “More regional central banks are getting a bit more aggressive in intervening in the market to protect the recovery in exports.”
The Central Bank of the Philippine on Monday said capital controls may be part of steps to deal with inflows. South Korea’s market regulators are reviewing more curbs after tightening limits on currency forwards last month, South Korean Financial Services Commission chairman Kim Seok-dong said last week.
The ringgit fell the most since the five days ended on Aug. 31. A Malaysian government report on Friday showed exports shrank 3.2 percent in October from a year earlier, following a 2.6 percent increase in September.
India’s rupee erased gains, after reaching a one-month high of 54.045 per US dollar on Thursday. Indian lawmakers this week voted in favor of a government decision to open the retailing sector to the likes of Wal-Mart Stores Inc.
In Europe, the euro fell against the US dollar and yen for the first time in four weeks, seeing its biggest one-day decline in a month on Thursday as the ECB joined the Bundesbank in scaling back growth projections.
The US dollar weakened against higher-yielding currencies after the nation’s employment rate unexpectedly fell to an almost four-year low. The euro fell 0.5 percent to US$1.2927 in New York for the first weekly loss since Nov. 9. It touched US$1.2877 on Friday, the weakest since Nov. 23. The euro declined 0.4 percent to ¥106.67, reaching ¥106.12 on Friday, the lowest in more than a week. The yen was little changed versus the US dollar at ¥82.49.
The euro has lost 2.5 percent this year, the second-worst performer among the 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen slid 9.5 percent and the US dollar fell 2.2 percent.
The Dollar Index, which IntercontinentalExchange Inc uses to track the greenback against currencies of six US trading partners, rose 0.3 percent to 80.412, for its first gain in three weeks.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last