The US dollar had the longest rally since teenagers bought Beatles albums and Lyndon Johnson was president as the US Federal Reserve signaled interest rates would rise next year while other central banks pushed stimulus plans.
The US Dollar Index rose for a 10th consecutive week, the longest since at least March 1967. Sterling rose after Scotland rejected independence, reviving bets the Bank of England (BOE) would join the Fed in raising rates.
The yen fell versus all of its 16 major peers as the Bank of Japan pledged to maintain stimulus to fight deflation, while the European Central Bank debuted a loan program. A report next week may revise second-quarter US economic growth higher.
“The Fed and the BOE are the two central banks that’ll start hiking rates next year, and we like being long dollar and sterling,” said Athanasios Vamvakidis, head of Group of 10 foreign-exchange strategy at Bank of America Merrill Lynch in London. “There’s more room for investors to accumulate long positions on the dollar.”
The US Dollar Index, which Intercontinental Exchange Inc uses the gauge to track the greenback against the currencies of six trade partners, increased 0.6 percent this week in New York to 84.735. It was the highest closing level since June 30, 2010.
The yen dropped against the US dollar for a sixth week, the longest losing streak this year, depreciating 1.6 percent to ￥109.04 per greenback. It touched ￥109.46, the weakest level since Aug. 29, 2008. The US currency gained 1 percent to US$1.2829 per euro, the strongest since July 10 last year. The euro rose 0.5 percent to ￥139.89 in a second weekly advance.
The pound rose for the first week in three versus the euro and the US dollar after the results of Scotland’s vote were announced and opponents of independence won, 55 percent to 45 percent.
The UK currency advanced 1.2 percent, the most since June, to ￡0.7876 per euro and reached ￡0.7810, the strongest since July 2012. Sterling rose 0.1 percent to US$1.6288 and touched US$1.6525, the highest since Sept. 2.
NO VIRUS BLUES: A SEMI Taiwan official said that the virus does not slow down the global semiconductor industry’s investment in manufacturing equipment The production value of the nation’s semiconductor industry is expected to grow 16.7 percent this year from last year, outpacing the global industry’s 3.3 percent growth, industry association SEMI said yesterday. That would help Taiwan safeguard its second spot in the global semiconductor market with a production value of more than NT$3 trillion (US$102.73 billion), SEMI Taiwan president Terry Tsao (曹世綸) told a media briefing in Taipei for the Semicon Taiwan trade show beginning today. The global semiconductor industry’s production value is expected to increase to US$426 billion this year, SEMI said. In terms of semiconductor equipment investment, equipment billings from Taiwanese firms
Intel Corp has received licenses from US authorities to continue supplying certain products to Huawei Technologies Co (華為), a company spokesman said yesterday. Washington has been pushing governments around to world to squeeze out Huawei, saying that the telecom giant would hand data to Beijing for espionage. From Monday last week, new curbs have barred US companies from supplying or servicing Huawei. This week, the state-backed China Securities Journal reported that Intel had received permission to supply Huawei. China’s Semiconductor Manufacturing International Corp (SMIC, 中芯國際), which uses US-origin equipment to make chips for Huawei and other companies, last week confirmed that it had sought
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