Indonesia’s rupiah and India’s rupee led a drop in Asian currencies this week, as foreign funds pulled money from regional assets on speculation the US would soon start tapering stimulus.
The rupiah fell by the most since 2008, as minutes of the US Federal Reserve’s meeting last month, released on Wednesday, showed policymakers were “broadly comfortable” with reducing bond-buying this year should the US economy improve.
Thailand entered a recession in the second quarter and Malaysia’s current-account surplus shrank 70 percent, reports showed, pushing the baht and the ringgit to their weakest levels since 2010.
“Funds are flowing out from emerging markets, weighing on the regional currencies,” said Koji Fukaya, chief executive officer and foreign-exchange strategist at FPG Securities Co in Tokyo. “The contrast is becoming clearer between the US, where the economy is recovering, and slowing growth in emerging countries.”
The rupiah fell 3.7 percent this week to 10,780 per US dollar on Friday in Jakarta, according to prices from local banks. The rupee weakened 2.6 percent to 63.33, the baht slid 2.1 percent to 31.93 and the ringgit fell 0.7 percent to 3.3005.
The New Taiwan dollar slid 0.2 percent this week to NT$30.053 against the US dollar. Although the local currency rallied for the first time in four days on Friday, as gains in the equity market bolstered demand for the NT dollar, central bank intervention limited the greenback’s fall, dealers said.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most active currencies excluding the yen, declined 0.6 percent to 114.63, the biggest weekly drop in two months. Global funds sold US$1.5 billion more Thai, Indonesian and Taiwanese equities than they bought in the first four days of the week, exchange data show.
Elsewhere in Asia, the Philippine peso slumped 1.4 percent to 44.263 per US dollar in two days after onshore financial markets were closed for the first three days of the week because of floods and a holiday. South Korea’s won declined 0.3 percent to 1,117 this week and China’s yuan slipped 0.1 percent to 6.1210.
EURO, YEN
The US dollar declined against the euro after purchases of new US homes unexpectedly fell by the most in more than three years last month.
The Bloomberg US Dollar Index dropped for the first time in three days after June’s new-home sales number was also revised down. The greenback still rose this week after the US Federal Open Market Committee minutes released showed most officials are comfortable with a plan to start reducing bond purchases if the economy improves. The Canadian dollar rebounded from a six-week low versus the US currency. The real surged after Brazil announced an intervention program.
The US dollar declined 0.2 percent to US$1.3383 per euro at 5pm in New York after earlier gaining 0.2 percent. The yen was little changed at ¥98.72 per US dollar after touching ¥99.15, the weakest level since Aug. 5. Japan’s currency dropped 0.2 percent to ¥132.1 per euro, extending its weekly loss to 1.6 percent.
The Bloomberg US Dollar Index, which tracks the currency against a basket of its 10 major counterparts, fell 0.2 percent to 1,026.15 after climbing 0.2 percent. It reached 1,031.37 on Friday, the highest level since Aug. 2, and gained 0.4 percent this week.
The pound posted its biggest weekly slide versus the euro since May as investors bet Bank of England Governor Mark Carney will use a speech next week to affirm his intention to hold borrowing costs at an all-time low.
The pound depreciated 0.8 percent this week to £0.8597 per euro at 5pm London time on Firday, the steepest decline since the period ended May 24. Sterling fell 0.4 percent to US$1.5575 after gaining 2.2 percent in the previous two weeks.
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