Emerging markets may have further reason to complain about perceived currency wars next year as central banks in rich nations become more aggressive in chasing the economic boost of weaker exchange rates.
After a year in which developing nations such as Brazil accused the US and other advanced economies of driving exchange rates down through quantitative easing, strategists at Royal Bank of Canada (RBC) say Group of 10 (G10) central banks are becoming more active in trying to lower currencies.
“We find substantial evidence that exchange rates are playing a greater role in central banks’ policy decisions,” RBC strategists Adam Cole and Elsa Lignos said in a Dec. 14 report. “It would seem that the G10 is doomed to follow EM [emerging markets’] central banks down the path of rising intervention, or at least exchange rate-driven policy.”
They found that many of the G10 central banks are increasingly highlighting currency concerns and signaling they may do something about them.
To measure that, the authors created a so-called verbal intervention index, trawling through three years of monetary policy statements and assessments for currency references. They then designed a scorecard running from zero to 10. The lowest number amounts to a mere comment and the highest refers to explicitly setting monetary policy to achieve a certain exchange rate.
The findings show that aside from the Swiss National Bank, which caps the Swiss franc against the euro, Norway’s central bankers indicate the highest level of concern by often linking a strong krone to the possibility of an interest rate cut.
Aggregating the results, RBC’s intervention index shows a reading of four, up from about one at the start of last year. A four may mean the central bank is expressing a negative opinion on currencies or that the exchange rate is a barrier to growth.
Apple Inc has closed in on an agreement with OpenAI to use the start-up’s technology on the iPhone, part of a broader push to bring artificial intelligence (AI) features to its devices, people familiar with the matter said. The two sides have been finalizing terms for a pact to use ChatGPT features in Apple’s iOS 18, the next iPhone operating system, said the people, who asked not to be identified because the situation is private. Apple also has held talks with Alphabet Inc’s Google about licensing its Gemini chatbot. Those discussions have not led to an agreement, but are ongoing. An OpenAI
INSATIABLE: Almost all AI innovators are working with the chipmaker to address the rapidly growing AI-related demand for energy-efficient computing power, the CEO said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported about 60 percent annual growth in revenue for last month, benefiting from rapidly growing demand for artificial intelligence (AI) and high-performance computing applications. Revenue last month expanded to NT$236.02 billion (US$7.28 billion), compared with NT$147.9 billion in April last year, the second-highest level in company history, TSMC said in a statement. On a monthly basis, revenue surged 20.9 percent, from NT$195.21 billion in March. As AI-related applications continue to show strong growth, TSMC expects revenue to expand about 27.6 percent year-on-year during the current quarter to between US$19.6 billion and US$20.4 billion. That would
‘FULL SUPPORT’: Kumamoto Governor Takashi Kimura said he hopes more companies would settle in the prefecture to create an area similar to Taiwan’s Hsinchu Science Park The newly elected governor of Japan’s Kumamoto Prefecture said he is ready to ensure wide-ranging support to woo Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to build its third Japanese chip factory there. Concerns of groundwater shortages when TSMC’s two plants begin operations in the prefecture’s Kikuyo have spurred discussions about the possibility of tapping unused dam water, Kumamoto Governor Takashi Kimura said in an interview on Saturday. While Kimura said talks about a third plant have yet to occur, Bloomberg had reported TSMC is already considering its third Japanese fab — also in Kumamoto — which would make more advanced chips. “We are
Huawei Technologies Co’s (華為) latest high-end smartphone features more Chinese suppliers, including a new flash memory chip and an improved chip processor, a teardown analysis showed, pointing to the progress China is making toward technology self-sufficiency. The inside of Huawei’s Pura 70 Pro was examined by online tech repair company iFixit and consultancy TechSearch International, finding components made by Chinese suppliers. The firms also found that the Pura 70 phones run on an advanced processing chipset made by Chinese chip foundry Semiconductor Manufacturing International Corp (SMIC, 中芯) called the Kirin 9010, which is likely a slightly improved version of the advanced chip