Sun, Jul 07, 2019 - Page 14 News List

NT dollar slides as US jobs report lifts greenback to high

Staff writer, with CNA and Reuters

The New Taiwan dollar on Friday fell against the US dollar, shedding 0.005 to close at NT$31.017, but gaining 0.2 percent from NT$31.072 a week earlier.

Turnover totaled US$602 million during the trading session. The greenback opened at NT$31.110, and moved between NT$31.085 and NT$31.115 before the close.

Elsewhere on Friday, the US dollar gained against a basket of currencies to its highest levels in two-and-a-half weeks after data showed that US job growth rebounded strongly last month.

Nonfarm payrolls last month increased by 224,000 jobs, the most in five months, and well above the 160,000 jobs forecast by economists.

The strong gains came after job growth slowed sharply in May.

The economy created 11,000 fewer jobs in April and May than previously reported, the government said on Friday.

“You look at the US number for today and there’s quite a bit of sticker shock with that,” CIBC Capital Markets North America head of foreign exchange strategy Bipan Rai said in Toronto. “We think the sticker shock and thin liquidity is enough to drive the [US] dollar a little bit firmer for today.”

The data came as many traders and investors were away, a day after the US’ Independence Day holiday and ahead of the weekend.

The US dollar index, which measures the greenback against a basket of six major currencies, was last at 97.311, up 0.56 percent, after earlier rising to 97.443, the highest level since June 19.

However, moderate wage gains last month added to evidence that the US economy is slowing, while the increase in jobs was not enough to offset weakness in May.

“You did get a massive upside surprise, but again, that’s coming after a month in which you had a massive downside miss,” Rai said. “If you take the two numbers together you are still averaging at a clip that’s slower than prior years’ growth.”

Average hourly earnings rose US$0.06, or 0.2 percent, after gaining 0.3 percent in May. That kept the annual increase in wages at 3.1 percent for a second straight month.

The US dollar has weakened from a two-year high reached in May on growing expectations that the US Federal Reserve is closer to cutting interest rates.

US economic growth continued “at a solid pace” in the first half of this year, although it likely weakened in the past few months as higher tariffs depressed global trade and business investment weakened, the Fed said on Friday in its semi-annual report to the US Congress.

The euro on Friday also came under pressure after data showed that German industrial orders fell far more than expected in May, and the German Federal Ministry for Economic Affairs and Energy warned that this sector of Europe’s largest economy was likely to remain weak in the coming months.

A relentless slide in European government bond yields has forced investors to look for higher-yielding assets elsewhere, which has been holding back a sustained euro rally against the greenback.

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