The strengthening US dollar and continued foreign capital outflows have caused the NT dollar to weaken, breaking through the NT$32 level to a new seven-month low yesterday.
At its close in Taipei trading, the NT dollar dropped NT$0.177, or 0.56 percent, to NT$32.040 — the lowest since Feb. 5, when the local currency closed at NT$32.01 against the greenback.
INTERVENTION
In early trading, the NT dollar dipped NT$0.217, or 0.69 percent, to NT$32.08, but recouped part of its losses following mild intervention by the central bank.
Turnover was US$1.596 billion on the Taipei Forex Inc yesterday. Including turnover at the smaller Cosmos Foreign Exchange Inc, total transactions reached US$2.15 billion in Taipei trading.
“The decline in the NT dollar today is in line with the across-the-board weakness in Asian currencies against the US dollar as well as the [weak] euro,” an anonymous trader at Union Bank of Taiwan (聯邦銀行), said by telephone yesterday.
The euro slid yesterday below US$1.39 for the first time in a year after the European Commission gave a bleak outlook for the eurozone economies on Wednesday.
But the trader attributed the drop in the NT dollar and the central bank’s restricted role in defending the currency to a 1.28 percent drop in the South Korean won, which closed at 1,109.5 against the US dollar yesterday, down from 1,095.5.
KEY RIVAL
South Korea is one of the nation’s main rivals for exports and a stronger local currency can therefore hurt either country’s competitiveness.
So far this year, the NT dollar has appreciated 1.25 percent, while the won has depreciated by 15 percent, the trader said.
Continued capital outflows from Asia, including Taiwan, have led to a slide in local equities and a drop in Asian currencies in recent weeks.
In Taiwan yesterday, foreign institutional investors sold a net NT$11.06 billion in Taiwanese stocks, the Taiwan Stock Exchange’s data showed.
So far this month, foreign investors have offloaded a net of NT$75 billion in local equities, compared with NT$29.85 billion last month, the stock exchange’s tallies showed.
LOOKING ELSEWHERE
“When foreign investors foresee slowing demand in Asian exports, they move funds away from this region. They will return to this region only when the economic fundamentals improve,” the trader said.
“As a result, there’s no reason to expect a stronger NT dollar in the short term,” the trader said.
As usual, the central bank said last night in a faxed statement that the NT dollar was “relatively stable,” comparing the currency’s 0.56 percent setback yesterday to the won’s 1.28 percent drop and the Singapore dollar’s 0.75 percent drop.
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
The US on Friday penalized two Chinese firms that acquired US chipmaking equipment for China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), including them among 32 entities that were added to the US Department of Commerce’s restricted trade list, a US government posting showed. Twenty-three of the 32 are in China. GMC Semiconductor Technology (Wuxi) Co (吉姆西半導體科技) and Jicun Semiconductor Technology (Shanghai) Co (吉存半導體科技) were placed on the list, formally known as the Entity List, for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing (Beijing) Corp (中芯北方積體電路) and Semiconductor Manufacturing International (Beijing) Corp (中芯北京), the US Federal Register posting said. The
MORTGAGE WORRIES: About 34% of respondents to a survey said they would approach multiple lenders to pay for a home, while 29.2% said they would ask family for help New housing projects in Taiwan’s six special municipalities, as well as Hsinchu city and county, are projected to total NT$710.65 billion (US$23.61 billion) in the upcoming fall sales season, a record 30 percent decrease from a year earlier, as tighter mortgage rules prompt developers to pull back, property listing platform 591.com (591新建案) said yesterday. The number of projects has also fallen to 312, a more than 20 percent decrease year-on-year, underscoring weakening sentiment and momentum amid lingering policy and financing headwinds. New Taipei City and Taoyuan bucked the downturn in project value, while Taipei, Hsinchu city and county, Taichung, Tainan and Kaohsiung
India’s ban of online money-based games could drive addicts to unregulated apps and offshore platforms that pose new financial and social risks, fantasy-sports gaming experts say. Indian Prime Minister Narendra Modi’s government banned real-money online games late last month, citing financial losses and addiction, leading to a shutdown of many apps offering paid fantasy cricket, rummy and poker games. “Many will move to offshore platforms, because of the addictive nature — they will find alternate means to get that dopamine hit,” said Viren Hemrajani, a Mumbai-based fantasy cricket analyst. “It [also] leads to fraud and scams, because everything is now
RSS