The Australian dollar slumped below US$0.90 yesterday after Australian central bank governor Glenn Stevens said he wanted to see it at US$0.85 to help stimulate trade-exposed sectors of the economy.
In a wide-ranging interview with the Australian Financial Review, Stevens also said he expected the US Federal Reserve to scale back its stimulus program “before too much longer.”
Speaking just weeks after saying currency intervention was part of his “toolbox,” Stevens said he would prefer a lower dollar over lower interest rates as a mechanism to spur the economy.
“To the extent that we get some more easing in financial conditions, at this point it’s probably more preferable for that to be via a lower currency at the margin than lower interest rates,” he told the newspaper.
Interest rates are at record lows of 2.5 percent after a series of cuts designed to stimulate the economy as its decade-long Asia mining boom cools.
With falling terms of trade, the bank chief said he expected the Australian dollar’s natural level to be lower.
“I thought US$0.85 would be closer to the mark than US$0.95 ... but really, I don’t think we can be that precise,” he said.
His comments sent the currency to a three-and-half-month low. It was trading at US$89.20 late yesterday, down from US$90.31 on Thursday.
The dollar’s earlier strength, despite a fall in commodity prices, has squeezed the Australian economy, eroding government revenues and pressuring industries such as manufacturing, prompting automaker Holden to this week announce it will stop making vehicles in Australia.
Australian Prime Minister Tony Abbott told parliament this week there was scope for the Reserve Bank of Australia to consider “prudent” intervention to push the Aussie lower and he said he was comfortable with Stevens’ comments yesterday.
“I’m very comfortable with what the governor has to say and I don’t believe it’s appropriate for me to add to it or to subtract from it,” he told reporters.
On US monetary policy, which has driven down the value of the US dollar, Stevens said: “I think we could all hope that the Fed will be in a position to do the tapering at some point before too much longer.”
With signs of improved economic activity, investors are tipping the US Federal Reserve to announce a small cut in its stimulus program at next week’s policy-setting meeting.
“When they get to the point where they can do that or begin that, that’s actually a good news story,” Stevens said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six