The US dollar rose with global stocks, oil and metals this week after China cut interest rates, while the euro weakened as European Central Bank (ECB) president Mario Draghi said the financial authority must drive inflation higher.
The Bloomberg Dollar Spot Index hit a five-year high at 4pm on Friday in New York, as the euro fell the most in a year versus the yen.
China cut benchmark interest rates for the first time since July 2012, stepping up efforts to support the world’s second-largest economy. The move put the People’s Bank of China on the side of the ECB and the Bank of Japan in adding stimulus. Draghi on Friday said the ECB needs to accelerate inflation and may broaden its asset purchases.
“Asia is strong on the interest rates and Europe is strong on the Draghi comments,” said Michael James, managing director of equity trading at Wedbush Securities Inc.
The advance in global shares pushed the MSCI All-Country World Index’s gain this week to 1.1 percent, the most since last month.
The euro fell 1.2 percent to US$1.2388 after Draghi’s speech, while the Bloomberg Dollar Spot Index gained 0.3 percent to the highest since March 2009.
The yen added 0.4 percent to ¥117.72 per US dollar on Friday and jumped 1.6 percent to 145.89 per euro.
In London, a second electoral victory for the UK Independence Party (UKIP) is putting the pound in the crosshairs, with a general election due in less than seven months.
Sterling fell against most of its 16 major peers on Friday after the anti-EU party won a by-election forced by the defection of ruling Conservative Party member of parliament.
Amid speculation that UKIP’s growing support will influence policy on Britain’s ties with its biggest trading partner, Standard & Poor’s head of sovereign ratings Moritz Kraemer said membership of the EU is an “integral” part of the company’s assessment of Britain, while Societe Generale SA said sterling may plunge as much as 10 percent if the UK leaves the 28-nation bloc.
The pound fell 0.1 percent to US$1.5680 on Friday and dropped 0.7 percent to ¥184.30.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by