Asian currencies declined for a third week, led by the Thai baht and Malaysia’s ringgit, amid concern a slowdown in China and US stimulus cuts will deepen a selloff in emerging markets.
The Bloomberg JPMorgan-Asia Dollar Index fell 0.1 percent this week as a report signaled China’s manufacturing contracted for the first time in six months.
The US Federal Reserve said on Wednesday it will pare its monthly bond purchases by US$10 billion to US$65 billion this month, following a similar reduction last month.
The baht had its worst week in almost a month after global funds pulled money from the nation’s assets amid concern an election today will trigger more violence.
“China has a big impact on the risk of emerging markets,” said Thomas Harr, Singapore-based head of local market strategy at Standard Chartered PLC. “That is weighing on Asia combined, with other concerns about tapering and political uncertainty in emerging markets.”
Thailand’s baht weakened 0.5 percent during the week to 33.02 per dollar in Bangkok, according to data compiled by Bloomberg.
The ringgit fell 0.5 percent this week through Friday to 3.3486, Indonesia’s rupiah dropped 0.3 percent to 12,210, while the Philippine peso was steady at 45.318. The Chinese yuan slipped 0.2 percent to 6.06.
Most financial markets in Asia were shut on Friday for the Chinese New Year holiday, except for Thailand and India. Taiwan and South Korea closed from Thursday.
A purchasing managers’ index (PMI) for China fell to 49.5 last month from 50.5 the previous month, HSBC Holdings PLC and Markit Economics reported on Thursday. The reading compared with the median 49.6 estimate in a Bloomberg News survey of economists. A number below 50 indicates contraction.
However, according to China’s National Bureau of Statistics and the China Federation of Logistics and Purchasing, the monthly PMI declined to 50.5 last month after recording 51.0 in December and 51.4 in November.
“We expect China hard-landing fears to be a source of occasional bouts of emerging-market stress this year,” Tim Condon, Singapore-based head of Asian research at ING Groep NV, wrote in a note on Thursday. “The Fed statement gave a new lease on life to the emerging-market stress.”
The baht touched the lowest level in almost three weeks on Friday as official data showed international investors sold US$499 million more Thai equities and bonds than they bought in the first four days of the week.
Thai Prime Minister Yingluck Shinawatra has declared a state of emergency and is deploying 10,000 police in Bangkok alone for the election as she seeks to avoid a repeat of violence that obstructed advance voting on Jan. 26.
The New Taiwan dollar closed up 0.25 percent at NT$30.376 against the US dollar on Wednesday, its second straight trading day of appreciation before the Lunar New Year holiday. The currency advanced 0.1 percent to NT$30.376 for the week. The NT dollar rose NT$0.075 versus the greenback on the Taipei Foreign Exchange Market on Wednesday, from NT$30.451 on Tuesday.
On the smaller Cosmos Foreign Exchange Market, the local currency ended at NT$30.365 against the US dollar on Wednesday, up NT$0.073 from Tuesday.
The local forex market is closed through Tuesday for the holiday.
Elsewhere in Asia, India’s rupee was little changed this week at 62.6575 per dollar, while South Korea’s won climbed 0.9 percent to 1,070.30 on Wednesday.
Additional reporting by staff writer
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is