The New Taiwan dollar and the won led declines in Asian currencies this week, on the back of speculation that the US Federal Reserve will further cut its stimulus as the US economy improves.
The Bloomberg-JPMorgan Asia Dollar Index snapped a two-week advance, as data showed that companies in the world’s largest economy last month added the most workers since November 2012 and jobless claims declined.
“Asian currencies are bearing some of the brunt of the [US] dollar[’s] strength that is being brought about by better US data,” said Sim Moh Siong, a foreign exchange strategist at Bank of Singapore Ltd.
The NT dollar posted a fifth weekly drop amid speculation that the central bank intervened to keep exporters competitive with South Korea and Japan, while the won had its biggest five-day loss since the period ended on Dec. 20 last year, due to concerns that a weak yen will hurt South Korea’s exports.
Taiwan’s dollar fell 0.6 percent this week to NT$30.212, compared with NT$30.039 on Jan. 3, while the won depreciated 0.6 percent to 1,061.38 per US dollar in Seoul, data compiled by Bloomberg show.
The Taiwanese currency dropped to a six-month low of NT$30.35 on Monday, amid speculation that the central bank intervened to keep exporters competitive with South Korean and Japanese companies.
Shipments from Taiwan, which make up about 60 percent of the economy, shrank 1.9 percent last month from a year earlier, an official report this week said. That compares with growth of 7.1 percent in South Korea, while figures from Japan show that exports increased 18.4 percent in November last year.
In Taipei, global investors bought US$174 million more local stocks than they sold this week, exchange data show.
“Funds seem to be entering Taiwan now, but the currency has dropped a lot, so I tend to think it was the result of central bank intervention,” said Andrew Tsai (蔡耀德), a Taipei-based economist at KGI Securities.
If the won keeps depreciating, the NT dollar will follow, he added.
The won’s decline this week — which saw it drop the most in six months on Monday — was driven by speculation that the Bank of Korea would cut borrowing costs due to the weaker yen’s threat to exporters. Still, policymakers kept the benchmark rate steady on Thursday.
Bank of Korea Governor Kim Choong-soo said that while Asia’s fourth-largest economy is growing near its potential, the yen may hurt its automobile, steel and machinery industries. The won gained 7 percent in the past six months against the US dollar, while the yen lost 5 percent, prices compiled by Bloomberg show.
South Korea will act against “herd behavior” and try to stabilize markets, South Korean Vice Minister of Finance Choo Kyung-ho said in Seoul on Friday.
In Beijing, the yuan touched a 20-year high on Friday, after the People’s Bank of China raised the currency’s reference rate and as figures showing faster import growth boosted optimism that local demand is starting to recover.
The Chinese central bank strengthened the yuan’s fixing by 0.17 percent — the most in two weeks — to 6.1008 per US dollar.
The yuan traded 0.05 percent higher at 6.0521 per US dollar on Friday in Shanghai, little changed from 6.0515 at the end of last week, China Foreign Exchange Trade System prices show.
Elsewhere in Asia this week, the Singapore dollar dropped 0.3 percent to S$1.2703, the baht declined 0.2 percent to 33.070, the Philippine peso lost 0.1 percent to 44.700, the ringgit rose 0.6 percent to 3.2695, India’s rupee gained 0.4 percent to 61.9050 and Indonesia’s rupiah advanced 0.1 percent to 12,162.
The greenback had its biggest weekly drop against the yen in almost three months, as US payrolls rose less than forecast last month, fueling concern that the Fed will slow reduction in bond-buying.
The US dollar fell 0.7 percent to ¥104.18 this week in New York, the biggest drop since the five days ending on Oct. 18 last year, and weakened 0.6 percent to US$1.3670 per euro, as the yen added 0.1 percent to ¥142.39 per euro.
The Bloomberg Dollar Spot Index, which tracks the US currency against 10 of its major counterparts, decreased 0.2 percent to 1,023.77, after touching 1,030.42 on Thursday, the highest since Sept. 9 last year.
The yen gained as futures traders trimmed bets for a second week that the currency would drop, figures from the Commodity Futures Trading Commission show.
In London, the pound snapped a three-week rally against the euro on signs that manufacturing slowed and construction output dropped.
Sterling weakened 0.3 percent this week to £0.8297 per euro, while gaining 0.4 percent against the greenback to end at US$1.6484.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last