Indonesia’s rupiah and the Indian rupee led declines among Asian currencies this week on the back of concern that the two nations’ trade deficits will widen after violence in Iraq caused a spike in global oil prices.
Brent crude reached a nine-month high of US$115.71 per barrel on Thursday as militants closed in on Baghdad, the capital of OPEC’s second-largest producer.
“The situation in Iraq is of concern,” said Ho Woei Chen, an economist at United Overseas Bank Ltd. “Emerging-market currencies, especially those with problematic external balances and a reliance on imported oil, are vulnerable.”
In Taipei, the New Taiwan dollar was little changed, closing the week at NT$30.065 against its US counterpart, compared with NT$30.053 on June 13.
The greenback rose against the NT dollar on Friday, gaining NT$0.029 after the central bank intervened to reverse earlier losses, dealers said.
Before the intervention, the US currency trended lower for most of the session on continued fund inflows into the country after the US Federal Reserve indicated that it will keep interest rates low for some time, they said.
Foreign funds also entered other markets in the region to push up regional currencies, such as the yen, which served as an indication to traders here to buy into the NT dollar and dump the greenback, the dealers added.
Fund inflows into the region are expected to continue on the back of the Fed’s comments after its policymaking meeting that wrapped up Wednesday, dealers said.
A stronger yuan, which rose 0.02 percent against the US dollar at one point on Friday, added downward pressure on the greenback in the local foreign exchange market after the People’s Bank of China raised the yuan reference rate by 0.01 percent from a day earlier, they said.
As a result, the US dollar fell below the NT$30 mark again during the session.
The Fed’s pledge will keep some Asian currencies supported as funds flow into emerging markets, said Sook Mei Leong, the Southeast Asia head of global markets research at Bank of Tokyo-Mitsubishi UFJ Ltd in Singapore.
“Some Asian currencies continue to hold up very well,” she said, adding that the Fed is still dovish, which is positive for risk-taking.
In Jakarta, the rupiah slid 1.5 percent this week to 11,972 per US dollar, while the rupee fell 0.7 percent to 60.1875, prices from local banks compiled by Bloomberg show.
The rupiah touched 12,027 per US dollar on Wednesday, the weakest level since Feb. 13. Indonesia, a former OPEC member, is unlikely to become a net oil exporter again, leaving policymakers to grapple with a long-term revenue shortfall as production shrinks, Indonesian Minister of Finance Chatib Basri said on Wednesday. Fuel imports made up 23 percent of the country’s overseas purchases in April.
The rupee declined for a fourth week to record its longest losing streak since April. India’s trade shortfall reached a 10-month high of US$11.2 billion last month and wholesale price inflation accelerated to hit this year’s fastest pace at 6.01 percent, reports showed this month.
The Bloomberg-JPMorgan Asia Dollar Index recorded its first weekly drop this month. The gauge, which tracks the region’s most-traded currencies excluding the yen, lost 0.3 percent to 115.72 this week.
In Hanoi, the dong weakened after the State Bank of Vietnam devalued the currency for the first time in a year in a bid to boost exports, falling 0.4 percent to 21,310.
Elsewhere in Asia, the yuan fell 0.3 percent to 6.2260, the baht dropped 0.2 percent to 32.452, the Philippine peso was little changed at 43.790 the ringgit fell 0.2 percent to 3.2235 and the won slipped 0.3 percent to 1,020.61.
Meanwhile, the greenback fell the most against the euro in 10 weeks, ahead of a report on Wednesday next week that is forecast to show that orders for big ticket factory goods in the US fell last month.
“The Fed’s intention is to convince the market that policy will remain accommodative and liquidity abundant for a long, long time,” which “tends to work more against the dollar than for it,” Robert Lynch, a currency strategist at HSBC Holdings PLC, wrote in an e-mail.
The greenback fell 0.4 percent to 1.3600 per euro this week in New York, the biggest loss since April 11. It was little changed at ￥102.07, while the Japanese currency slipped 0.1 percent to ￥138.82 versus the euro.
In London, the pound advanced to the strongest level in five-and-a-half years against the greenback this week as bets that the Bank of England is moving closer to increasing its benchmark interest rate fueled demand for the UK currency.
The pound gained 0.3 percent to US$1.7013 this week after rallying 1 percent last week, when Bank of England Governor Mark Carney said that the first interest rate increase “could happen sooner than markets currently expect.”
Sterling hit a 20-month high versus the euro this week, ending on ￡0.7986 after hitting ￡0.7959 on Monday, the most since Oct. 1, 2012.
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
RSS