The US Dollar Index gained for a fifth straight week, its longest rally since June, as employers added more jobs last month than forecast, signaling better economic prospects for the US compared with other developed nations.
The index, Intercontinental Exchange Inc’s benchmark that tracks the greenback against the currencies of six major US trading partners, reached its highest level since Aug. 3. It added 0.5 percent to 82.715. The weekly gains streak was the longest since the five days ended June 1.
The euro touched its lowest level versus the greenback since December last year as European Central Bank policymakers said the region’s economy may shrink more than estimated and reduced their inflation forecast. The yen fell to the weakest level versus the dollar since 2009 as a report showed Japan’s current account deficit widened and the incoming central bank governor endorsed buying longer-maturity bonds. A report on Friday may show US consumer prices rose at a faster pace last month.
The US dollar rose 2.6 percent this week to ￥96 in New York, touching the highest level since Aug. 12, 2009. It gained 0.1 percent to US$1.3005 per euro, the fifth straight advance. The 17-nation currency appreciated 2.5 percent to ￥124.86.
The yen weakened on Friday as the Japanese Ministry of Finance said the deficit in the current account, the widest measure of trade, increased to ￥364.8 billion (US$3.8 billion) in January, up from ￥264.1 billion a month ago.
Japan’s currency has slumped 9.6 percent versus the US dollar this year as Japanese Prime Minister Shinzo Abe pushed the central bank to add to stimulus to beat deflation. Haruhiko Kuroda, Abe’s pick to become the next Bank of Japan (BOJ) governor, told lawmakers this week the scale of the BOJ’s asset purchases was insufficient to achieve its target of 2 percent inflation.
The pound declined to a two-and-a-half year low versus the dollar and dropped against the euro this week amid investor concern that UK policy makers are struggling to avoid an unprecedented triple-dip recession.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
ALL ABOUT STRATEGY: The company is optimistic, saying that its gross margin should increase year-on-year, but it is scaling back on its plans to expand capacity Quang Viet Enterprise Co (QVE, 廣越), which makes down jackets and garments for sportswear and outdoor brands including Adidas AG, yesterday said that revenue might drop 5 to 10 percent annually this year as some customers trimmed orders in response to the COVID-19 pandemic. That would mark its first revenue decline since 2016. Quang Viet posted record-high revenue of NT$16.26 billion (US$537.45 million) last year, up 22 percent from 2018. Down jackets made up 40 percent of it revenue last year. North Face Inc and Patagonia Inc are this year likely to reduce orders by 20 to 30 percent from a