Indonesia’s rupiah led a fall in Asian currencies this week as slowing economic growth in China dimmed the region’s export outlook.
China, the No. 1 destination for shipments from Taiwan, Indonesia, Thailand and South Korea, reported on Monday that expansion slowed for a second quarter. Apart from the rupiah and Malaysia’s ringgit, regional currencies weakened by 0.2 percent or less, as a reassurance from the US Federal Reserve that a tapering of stimulus is not imminent supported inflows.
“Asian nations’ dependence on China has been increasing and uncertainty surrounding China’s growth is raising concern about the region’s export outlook,” said Tohru Nishihama, a Dai-ichi Life Research Institute Inc economist.
The New Taiwan dollar lost 0.2 percent this week to NT$29.978, compared with NT$29.932 on July 12. The rupiah dropped 0.8 percent to 10,078 per US dollar in Jakarta, according to prices from local banks compiled by Bloomberg, Malaysia’s ringgit weakened 0.5 percent to 3.1923 and China’s yuan was little changed at 6.1379.
Fed Chairman Ben Bernanke’s comments in May and last month that the Fed may taper the program, which has driven emerging market inflows, sparked a slide in Asian currencies, debt and shares.
Foreign funds bought US$1.3 billion more Taiwanese, South Korean and Thai stocks than they sold in the first four days of the week, exchange data show.
The rupiah fell for a record 11th day on Friday and weakened beyond the 10,000 per US dollar level this week for the first time since 2009. Bank Indonesia Deputy Governor Perry Warjiyo said on July 11 the monetary authority has supplied US dollars to the market in the past two to three months while allowing the rupiah to slowly retreat.
The People’s Bank of China cut the yuan’s fixing on four of five days this week, lowering it to 6.1751 per US dollar on Friday, 0.2 percent less than on July 12. The Chinese currency can trade as much as 1 percent either side of the reference rate. The yuan is the only gainer among the 11 most-traded Asian exchange rates this year, rising 1.5 percent.
Elsewhere in Asia, India’s rupee rose 0.5 percent this week to 59.35 per US dollar on Friday on speculation the Central Bank of India intervened. The Philippine peso strengthened 0.1 percent to 43.362, Thailand’s baht rose 0.4 percent to 31.03, South Korea’s won rose 0.2 percent to 1,121.75 and Vietnam’s dong was steady at 21,223.
The US dollar fell for a second week versus most major peers after climbing last month when the Fed said bond-buying might be slowed.
The greenback weakened 0.6 percent to US$1.3143 per euro this week in New York, while the yen dropped 1.4 percent to ¥100.65 to the US currency and the euro appreciated 2 percent to ¥132.26 yen.
The Mexican peso was the best performer this week among the greenback’s 16 most-traded counterparts tracked by Bloomberg, rising 2.3 percent to 12.5325.
The yen fell after Bank of Japan (BOJ) policymakers at a meeting last week stuck with their pledge to expand the monetary base by ¥60 trillion (US$605 billion) to ¥70 trillion per year in their effort to stem deflation and stoke growth.
“The Fed is inching toward less accommodation, and the BOJ is still full-steam ahead on accommodation,” Westpac Banking Corp’s Richard Franulovich said on Monday.
The pound strengthened versus the euro for the first time in six weeks as minutes from the Bank of England’s last meeting showed policymakers voted unanimously against expanding stimulus.
The pound climbed 1 percent this week to US$1.5259 and appreciated 0.4 percent to £0.8612 per euro.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts