The dollar traded mainly higher on Friday as better-than-expected US data helped shift expectations on healthy growth going forward in the world's biggest economy.
However, the greenback lost ground against the New Taiwan dollar on the Taipei Foreign Exchange on Friday, decreasing NT$0.01 to close at NT$33.009.
A total of US$1.4 billion changed hands during the day's trading.
The US currency opened higher at NT$32.917, and fluctuated between NT$32.917 and NT$33.107.
The euro slipped to US$1.3442 at 9pm GMT from US$1.3454 in New York late on Thursday, after earlier in the day slipping below the US$1.34 mark for the first time in almost two months.
The US dollar rose to ?122.09 -- hitting its highest level since late January -- from ?121.71 on Thursday.
The US currency picked up momentum after data showed the US economy added a net 157,000 jobs last month, better than expected. Analysts said the report suggests the economy is coming out of its first-quarter soft patch but that inflation remains only moderate.
The payrolls are a key event for the market, which is anxious for fresh clues on the outlook for US interest rates.
The Federal Reserve has been on hold for nearly a year with base US rates at 5.25 percent. In recent months, market participants have shifted away from a perception that the Fed will need to cut rates to stimulate flagging growth.
Stephen Gallagher, economist at Societe Generale, said he has now thrown in the towel on his forecast for a Fed rate cut this year, and now sees the next move by the US central bank as a rate hike.
"More and more we are convinced the mid-cycle slowdown has ended and the economy is currently firming to trend," Gallagher said. "Against a backdrop of stubborn inflation and tight labor markets, our analysis going forward will be more focused on the timing of rate hikes, not cuts."
Meanwhile, the closely watched US ISM survey on manufacturing activity came in above forecasts, rising to 55.0 last month from 54.7 in April to reach its highest level for 12 months.
Analysts said the good news on the US economy was enough to offset evidence of moderating inflation, with the annual core PCE indicator -- the Federal Reserve's preferred measure of inflation -- dropping to a 13-month low of 2 percent, according to a US Commerce Department report.
The report also showed US consumer income down 0.1 percent in April, while spending rose 0.5 percent.
While the data as a whole shored up the dollar, there was some skepticism about the perceived improvement in the figures.
"The strength in May payrolls has largely emerged from services jobs, the durability of which remains doubtful," Ashraf Laidi at CMC Markets said.
Against this backdrop, the outlook for US interest rates is still cloudy, he noted.
Michael Woolfolk at Bank of New York said the easing inflation indicators suggest the Fed will be in no hurry to hike rates, and this limited the dollar's rally. But he said the greenback is keeping upward momentum.
"The real surprise in this morning's price action was not the relatively modest reaction to nonfarm payrolls and personal income and spending, but rather the positive dollar tone," he said.
"A ubiquitous sense of economic recovery pervades the market right now, which is unequivocally positive for the dollar. ... While players are having difficulty breaking below the 1.3400 level in the euro-dollar, further signs of the US economic rebound should make this a fait accompli by next week," Woolfolk said.
Next week's market focus is on Thursday's meeting of the European Central Bank in which the bank is seen as almost certain to raise its key interest rates to a five-and-a-half-year high to curb inflation in the 13-nation eurozone economy.
In late New York trading, the US dollar stood at 1.2209 Swiss francs from SF1.2250 on Thursday.
The pound was being traded at US$1.9819 after US$1.98.
UNCONVINCING: The US Congress questioned whether the company’s Chinese owners pose a national security risk and how the app might influence young users TikTok chief executive officer Shou Chew (周受資), confronted with an unforgiving, distrustful US Congress, tried to give answers in his testimony on Thursday that avoided offending either the US government or China. However, his evasiveness left Congress unsatisfied, with representatives hungrier than ever to punish TikTok for ties to its parent company ByteDance Ltd (字節跳動), based in Beijing. He did not bring his company any closer to a resolution. Politically, TikTok is in a tougher spot. Its executives had been discussing divesting from ByteDance to resolve US national security concerns, people familiar with the matter told Bloomberg. However, China this week said
The Investment Commission yesterday approved a Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) application to invest an additional US$3.5 billion in its Arizona subsidiary to manufactured advanced chips. The world’s largest contract chipmaker’s board of directors last month approved the funding project after TSMC started moving manufacturing equipment into the fab in December last year in preparation for the production of 4-nanometer chips next year. TSMC said it has also commenced the second phase of facility construction in Arizona. The second fab is to produce semiconductors using 3-nanometer technology in 2026. Altogether, TSMC plans to spend US$40 billion on the Arizona fabs, doubling its
Microsoft Corp has threatened to cut off access to its Internet search data, which it licenses to rival search engines, if they do not stop using it as the basis for their own artificial intelligence (AI) chat products, people familiar with the dispute have said. The software maker licenses the data in its Bing search index — a map of the Internet that can be quickly scanned in real time — to other companies that offer Web search, such as Apollo Global Management Inc’s Yahoo and DuckDuckGo. Last month, Microsoft integrated a cousin of ChatGPT, OpenAI’s AI-powered chat technology, into Bing. Rivals
KEY SECTOR: Taiwan’s new chip legislation is insufficient, and a more strategic ‘chip act’ that covers the whole semiconductor ecosystem is needed, MediaTek’s chairman said MediaTek Inc (聯發科) chairman Rick Tsai (蔡明介) yesterday urged the government to formulate a state semiconductor strategy and comprehensive “chip act” that includes local chip designers and smaller-scale semiconductor companies, as they are facing intensifying competition from China. The government is playing an increasingly important role in safeguarding the local semiconductor industry’s competitiveness, given that the US, the EU and Japan are offering hefty subsidies and significant tax incentives to build semiconductor capacity domestically, as they have realized the strategic importance of semiconductors, Tsai said. To implement such a program, the government should take steps to finance a “chip act,” Tsai said
RSS