The US dollar on Friday slid to a seven-week low against the Japanese yen after US Federal Reserve Chair Jerome Powell suggested that the central bank could cut interest rates in the wake of COVID-19.
Powell said that the central bank would “act as appropriate” to support the US economy in the face of risks posed by the coronavirus epidemic, but added that the economy remained in solid condition.
The yen was on track for its largest daily gain since May 2017 as investors moved into the safe-haven currency. It had strengthened to as high as ￥107.52 versus the US dollar and was last trading up 1.51 percent at ￥107.92.
The US dollar index was last down 0.324 percent to 98.127, down about 1 percent this week on rising expectations of a rate cut by the Fed. A cut of at least 25 basis points at the Fed’s meeting this month was fully priced in on Friday, versus expectations of 57.6 percent on Thursday.
Some investors suggested that the Fed could even cut rates sooner.
“It’s likely that markets will force the Fed to cut even before the March 18 meeting, and the question is, will that matter? Will that be enough to settle down markets in the near term?” Diamond Hill Capital Management Inc chief investment officer for fixed income Bill Zox said.
The yield on the two-year US Treasury note, which moves with expectations of changes in rate policy, has fallen by about 32.5 percent this week.
The rapid spread of the coronavirus increased fears of a pandemic, with six countries reporting their first cases and the WHO raising its global spread and impact risk alert to “very high.”
“The yen is significantly stronger from where it was even last week, when I was hearing people saying that the yen wasn’t a safe-haven anymore. We’re now back to appropriate levels,” TD Securities global head of foreign exchange strategy Mark McCormick said.
One additional factor supporting the yen could be that Japan’s public pension funds have been rebalancing assets, he said
“I think it’s pretty clear that the [Japanese Government Pension Investment Fund] is trading ahead of the announcements of their weights, which if you think about what they’ve done over the past five years, they’ve created an allocation that leans much more towards global equities, global credit, global fixed income — which in this environment would see dollar-yen rally as they’re pushing some of their flows outside of Japan,” McCormick said.
In Taipei on Thursday, the New Taiwan dollar rose against the US dollar, gaining NT$0.053 to close at NT$30.330, an increase of 0.2 percent from NT$30.403 on Feb. 21. Turnover totaled US$1.04 million during the trading session.
The market was closed on Friday for the 228 Memorial Day long holiday weekend.
Additional reporting by staff writer
The demise of the coal industry left the US’ Appalachian region in tatters, with lost jobs, spoiled water and countless kilometers of abandoned underground mines. Now entrepreneurs are eyeing the rural region with ambitious visions to rebuild its economy by converting old mines into solar power systems and data centers that could help fuel the increasing power demands of the artificial intelligence (AI) boom. One such project is underway by a non-profit team calling itself Energy DELTA (Discovery, Education, Learning and Technology Accelerator) Lab, which is looking to develop energy sources on about 26,305 hectares of old coal land in
Taiwan’s exports soared 56 percent year-on-year to an all-time high of US$64.05 billion last month, propelled by surging global demand for artificial intelligence (AI), high-performance computing and cloud service infrastructure, the Ministry of Finance said yesterday. Department of Statistics Director-General Beatrice Tsai (蔡美娜) called the figure an unexpected upside surprise, citing a wave of technology orders from overseas customers alongside the usual year-end shopping season for technology products. Growth is likely to remain strong this month, she said, projecting a 40 percent to 45 percent expansion on an annual basis. The outperformance could prompt the Directorate-General of Budget, Accounting and
Netflix on Friday faced fierce criticism over its blockbuster deal to acquire Warner Bros Discovery. The streaming giant is already viewed as a pariah in some Hollywood circles, largely due to its reluctance to release content in theaters and its disruption of traditional industry practices. As Netflix emerged as the likely winning bidder for Warner Bros — the studio behind Casablanca, the Harry Potter movies and Friends — Hollywood’s elite launched an aggressive campaign against the acquisition. Titanic director James Cameron called the buyout a “disaster,” while a group of prominent producers are lobbying US Congress to oppose the deal,
Two Chinese chipmakers are attracting strong retail investor demand, buoyed by industry peer Moore Threads Technology Co’s (摩爾線程) stellar debut. The retail portion of MetaX Integrated Circuits (Shanghai) Co’s (上海沐曦) upcoming initial public offering (IPO) was 2,986 times oversubscribed on Friday, according to a filing. Meanwhile, Beijing Onmicro Electronics Co (北京昂瑞微), which makes radio frequency chips, was 2,899 times oversubscribed on Friday, its filing showed. The bids coincided with Moore Threads’ trading debut, which surged 425 percent on Friday after raising 8 billion yuan (US$1.13 billion) on bets that the company could emerge as a viable local competitor to Nvidia
RSS