Asian currencies rose for a second week as optimism that US lawmakers will raise the debt limit to avoid a default spurred demand for riskier assets.
Indonesia’s rupiah led the advance, climbing 1.4 percent from a week ago to 11,365 per US dollar, as the Bloomberg-JPMorgan Asia Dollar Index increased 0.2 percent from Oct. 4.
The MSCI Asia Pacific Index climbed for a fourth day on Friday — the longest winning streak since Sept. 12 — after Republicans in the US House of Representatives proposed a short-term increase in the debt ceiling that would push the lapse of US borrowing authority from Thursday next week to Nov. 22.
“Markets are pricing in some kind of resolution in the US, therefore there is some modest positioning for Asian currencies,” said Nizam Idris, head of strategy for fixed income and currencies at Macquarie Bank Ltd. “When it happens, Asian currencies will bump up quite aggressively. The week started with some concern.”
In Taipei, the New Taiwan dollar added 0.04 percent this week to end on Friday at NT$29.490, compared with NT$29.502 on Friday last week.
The greenback fell against the NT dollar on Friday, shedding NT$0.058 as traders took cues from the gains posted by other regional currencies pushed by fund inflows to cut greenback holdings, dealers said.
As with recent sessions, the central bank stepped in to prop up the US dollar, helping the currency recover most of its earlier losses by the end of the session.
It was the first time the US dollar fell below the NT$29.50 mark since Jan. 25, when the greenback ended at NT$29.250.
Elsewhere in Asia, India’s rupee appreciated 0.6 percent to 61.08, Malaysia’s ringgit gained 0.1 percent to 3.1788 and China’s yuan fell 0.03 percent to 6.1220.
The rupiah completed a second week of gains after Bank Indonesia set guidelines on Wednesday for individuals and companies — including state-owned firms — to hedge against currency swings.
Having a current account deficit of between 2.5 percent and 2.7 percent of GDP next year would be “acceptable,” compared with 4.4 percent in the second quarter of this year, Bank Indonesia Senior Deputy Governor Mirza Adityaswara said on Friday.
In other parts of the region, South Korea’s won fell 0.1 percent this week to end at 1,071.40, while the Philippine peso lost 0.2 percent to 43.145, the Thai baht was little changed at 31.283 and Vietnam’s dong rose 0.1 percent to 21,095.
The optimism about a US resolution that boosted Asian currencies also propped up the US dollar, which rose for the first time in six weeks amid growing speculation that a compromise will be reached.
The yen fell the most since August versus the greenback as demand for Japan’s currency as a refuge ebbed amid optimism that the US deadlock would be broken.
The Bloomberg US Dollar Index, which tracks the greenback against 10 other major currencies, gained 0.2 percent to 1,012.38 this week in New York and touched a three-week high of 1,015.74 on Thursday.
The US dollar climbed 1.1 percent this week, the most since the five days ended on Aug. 23, to ¥98.58 and appreciated 0.1 percent to US$1.3544 per euro after weakening on Thursday last week to an eight-month low of US$1.3646. Europe’s 17-nation shared currency gained 1 percent to ¥133.51.
Sterling declined for a second week versus the dollar and euro after British industrial production unexpectedly shrank by 1.1 percent in August. It gained 0.1 percent in the previous month.
There was a “sense of disappointment” in the data, which “weighed on the pound,” Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd, said by telephone on Tuesday. “The pace of economic recovery in the UK may prove slightly less robust than anticipated.”
Sterling also weakened after a report on Friday showed UK construction slipped 0.1 percent in August. Economists in a Bloomberg survey had estimated a 0.8 percent increase.
The pound depreciated 0.3 percent to US$1.5957, falling to as low as US$1.5914, its weakest level since Sept. 18. Sterling declined 0.3 percent to £0.8410 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
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
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],”
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