The US dollar rose, poised for the biggest quarterly gain versus the euro since 2008, as European leaders’ struggle to forge a plan to bail out Greece pushed investors toward the perceived safety of the greenback.
The yen fell against all 16 of its most-traded counterparts this week as Japanese consumer prices dropped for a 12th month, increasing the chances the nation’s central bank will lag behind its peers in raising interest rates.
The US dollar appreciated 0.9 percent to US$1.3410 versus the euro, from US$1.3530 a week earlier. It was headed for a gain of 6.8 percent for the quarter, the largest since it advanced 11.8 percent in the three months ended in September 2008.
The yen dropped 2.1 percent, the most since Dec. 4, to ¥92.52 per US dollar, from ¥90.54 on March 19. The euro rose 1.3 percent to ¥124.06, from ¥122.51 last week.
The pound declined for a second week against the greenback on concern the recovery has yet to take hold and as investors bet the government isn’t acting fast enough to cut the budget deficit.
Sterling depreciated 0.9 percent in the week to US$1.4876 as of 5:38pm in London on Friday, and traded as low as US$1.4799, its weakest level since March 1. It fell against the dollar in three of the five trading days. Against the euro, the pound was little changed on the week at £0.9008.
Asian currencies declined this week, led by the Singapore dollar and South Korean won, as discord among leaders in European nations on how to solve Greece’s debt woes curbed investor appetite for emerging-market assets.
The won declined 0.5 percent for the week to 1,138.80 against the US dollar in Seoul and on Friday touched 1,148.40, the lowest level since March 3. The Singapore dollar fell 0.6 percent to S$1.4043.
Central banks in Taiwan and Thailand this week stressed they would intervene in currency markets after their respective exchange rates reached the strongest levels in at least 18 months.
The New Taiwan dollar traded unchanged on Friday at NT$31.88 against the greenback, and fell 0.3 percent during the five-day period, according to Taipei Forex Inc. It has dropped 0.7 percent from a September 2008 high of NT$31.667 on March 18.
The central bank said on Thursday it would enter the currency market when necessary to “maintain order” if “irregular factors caused large fluctuations.”
The baht traded little changed on Friday at 32.43 against the US dollar and dropped 0.4 percent from March 19, the first weekly slide in almost two months, according to data compiled by Bloomberg.
Indonesia’s rupiah fell 0.3 percent this week to 9,128 per dollar, while Malaysia’s ringgit lost 0.2 percent to 3.3070. The Philippine peso and China’s yuan were little changed at 45.507 and 6.8274 respectively.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
STUMPED: KMT and TPP lawmakers approved a resolution to suspend the rate hike, which the government said was unavoidable in view of rising global energy costs The Ministry of Economic Affairs yesterday said it has a mandate to raise electricity prices as planned after the legislature passed a non-binding resolution along partisan lines to freeze rates. Chinese Nationalist Party (KMT) lawmakers proposed the resolution to suspend the price hike, which passed by a 59-50 vote. The Taiwan People’s Party (TPP) voted with the KMT. Legislative Speaker Han Kuo-yu (韓國瑜) of the KMT said the resolution is a mandate for the “immediate suspension of electricity price hikes” and for the Executive Yuan to review its energy policy and propose supplementary measures. A government-organized electricity price evaluation board in March
NOVEL METHODS: The PLA has adopted new approaches and recently conducted three combat readiness drills at night which included aircraft and ships, an official said Taiwan is monitoring China’s People’s Liberation Army (PLA) exercises for changes in their size or pattern as the nation prepares for president-elect William Lai’s (賴清德) inauguration on May 20, National Security Bureau (NSB) Director-General Tsai Ming-yen (蔡明彥) said yesterday. Tsai made the comment at a meeting of the Legislative Yuan’s Foreign Affairs and National Defense Committee, in response to Democratic Progressive Party (DPP) Legislator Wang Ting-yu’s (王定宇) questions. China continues to employ a carrot-and-stick approach, in which it applies pressure with “gray zone” tactics, while attempting to entice Taiwanese with perks, Tsai said. These actions aim to help Beijing look like it has
China is mischaracterizing UN Resolution 2758 for its own interests by conflating it with its “one China” principle, US Deputy Assistant Secretary for China and Taiwan Mark Lambert said on Monday. Speaking at a seminar held by the German Marshall Fund, Lambert called for support for Taiwan’s meaningful participation in the international community at a time when China is increasingly misusing Resolution 2758. The resolution had a clear impact when it changed who occupied the China seat at the UN, Lambert said. “Today, however, the PRC [People’s Republic of China] increasingly mischaracterizes and misuses Resolution 2758 to serve its own interests,” Lambert said. “Beijing