Call it a reality check.
After the US Federal Reserve tempered market expectations for a mid-year interest-rate increase last week, sending the US dollar to its biggest weekly decline since 2011, traders refocused on the bigger picture: The US central bank is still moving toward monetary tightening as global peers loosen policy.
Fed Chair Janet Yellen on Friday said she expects rates to rise this year, supporting the greenback, which gained the past two days and headed for its ninth straight monthly advance.
“The big policy story about divergence between the US and other economies is still coming through,” London-based Commonwealth Bank of Australia strategist Peter Dragicevich said by telephone on Friday. “It’s really just a consolidation phase in the dollar and we should see it continue to strengthen.”
The Bloomberg Dollar Spot Index has advanced 1.6 percent in March to 1,190.89 in New York, pushing its climb this year to 5.3 percent. The nine months of gains would extend what is already the longest monthly streak in data going back to 2004.
The dollar’s 2.7 percent increase to US$1.0889 versus the euro this month would also represent a ninth consecutive month of gains, the most in the history of the shared currency.
Only the yen bucked the trend, gaining 0.4 percent to ¥119.13 per dollar on the month amid an increase in haven demand as Saudi-led forces battled Shiite rebels in Yemen.
“I expect that conditions may warrant an increase in the federal funds rate target sometime this year,” Yellen said on Friday at a conference hosted by the San Francisco Fed.
She and fellow policymakers “generally anticipate that a rather gradual rise in the federal funds rate will be appropriate over the next few years.”
The US currency’s long-term advance hit headwinds on March 18, when Fed policymakers reduced forecasts for interest rates and economic growth and indicated they were in no rush for the first increase since 2006. The Fed has held its main borrowing rate at zero to 0.25 percent since 2008 to support the economy.
Traders who had been betting on a rate hike as soon as mid- year quickly backed away. Futures prices showed a 55 percent chance of an increase by September on March 17, the day before the Fed meeting; those odds were 36 percent on March 27.
The dollar sold off on the Fed announcement, plummeting 2.2 percent last week, the biggest drop since 2011, and declining early this week before paring losses. The Bloomberg Dollar Spot Index slid 0.3 percent on the week.
The British pound rose for a second day versus the dollar as data showed retail sales in the UK increased last month by more than economists forecast, adding to speculation the Bank of England will move closer to raising interest rates.
The pound advanced 0.3 percent to US$1.4929 at 12:12pm London time, set for the biggest increase since March 20.
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
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained