The US dollar has another hurdle to clear after its two-week rally: Friday’s jobs report.
The currency advanced this week to a 12-year high against the yen on speculation the US Federal Reserve is moving closer to raising interest rates in contrast with its global peers. Investors are looking to the employment figures for more evidence that the world’s largest economy is recovering enough to convince the central bank to increase borrowing costs for the first time since 2006.
“The US dollar uptrend has resumed,” Matt Weller, an analyst at Gain Capital Holdings Inc’s Forex.com unit in Grand Rapids, Michigan, said by phone on Friday.
The strength is backed by “conviction that the Fed, based on their recent comments, is going to raise rates one way or another this year,” he said.
The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 major trading partners, rose 1 percent to 1,191.94 this week in New York, extending last week’s 2.6 percent climb.
The greenback surged 2.2 percent to ¥124.15 and climbed 0.2 percent against the euro to US$1.0986.
“We’re finally starting to see data that are pointing to a turnaround in US economic performance,” Sireen Harajli, a strategist at Mizuho Bank Ltd in New York, said by phone on Friday.
“The dollar will continue to gain” because next week’s employment report will probably meet or exceed forecasts, she said.
Payrolls increased by 225,000 this month after gaining by 223,000 in April, according to the median estimate of 61 analysts surveyed by Bloomberg. Average hourly earnings rose 0.2 percent versus 0.1 last month, a separate survey showed.
“Should the data remain firm, as we expect, there is scope for further US dollar upside,” analysts at Morgan Stanley, including Evan Brown in New York, wrote in a note to clients. “Further solid employment gains are likely to prompt the market to re-price current sanguine expectations for Fed tightening.”
Futures show that hedge funds and other speculators are back on board for the US dollar rally, after adding to bullish wagers on the US currency for the first time in nine weeks. The difference in the number of bets on a rise in the dollar compared with those on a loss against eight of the greenback’s major peers increased by 48,829 contracts in the week ended Tuesday, according to Commodity Futures Trading Commission data compiled by Bloomberg.
US dollar bulls were cheered this week by US durable goods orders and consumer confidence data that beat expectations.
The greenback has gained 3.1 percent in the past month, the best performer among 10 developed-nation peers, according to Bloomberg Correlation-Weighted Indexes. It surged to ¥124.46 on Thursday, the highest since December 2002.
Meanwhile, investors’ initial relief that the UK elected a majority government, which helped propel the pound to its highest level in five months against the US dollar, is over.
Victorious British Prime Minister David Cameron is now touring neighboring states in search of allies for his proposed changes to the nation’s relationship with the EU. As the looming referendum on whether the nation will choose to leave the world’s biggest single market has shot to the top of the political agenda, sterling forfeited almost all of its post election rally versus the US dollar. This week it came off its two-and-a-half-month high against the euro.
“I don’t have concerns for sterling from a data front,” said Steve Barrow, head of Group-of-10 strategy at Standard Bank Group Ltd. “Where there could be more concerns is from the EU referendum. The downtrend is reasonably entrenched as far as sterling-dollar is concerned.”
The pound fell for a sixth day against the US dollar on Friday, its worst run by length since October last year. It was down 1.5 percent on the week to US$1.5268 at 5:15pm in London before which it had touched US$1.5237, its lowest since May 7, election day. Sterling weakened 1.2 percent to £0.7198 per euro in the five-day period.
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],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
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