The greenback rose the most in more than a year this week as a US jobs report exceeded all forecasts, highlighting a growing gulf between the world’s largest economy and other developed nations.
By contrast, the euro sank the most since September, as two European Central Bank (ECB) officials said policymakers may consider broad-based asset purchases next month, while the yen weakened beyond ￥120 per dollar for the first time since July 2007 ahead of Japan’s legislative elections next Sunday.
The Bloomberg Dollar Spot Index — which tracks the unit against 10 trading partners — rose 1.4 percent in its seventh weekly advance and biggest five-day gain since the period ending on Nov. 1 last year. The gauge closed at 1,122.34 on Friday, its highest since March 2009.
The greenback added 2.4 percent to ￥121.46 to advance the most against the yen since Oct. 31, while rising 1.4 percent versus the euro, the most since Sept. 5.
The shared currency appreciated 1 percent to ￥149.23, climbing for an eighth consecutive week to extend its longest streak of gains against the yen since February last year.
Japan’s currency fell before the nation votes on whether to give Japanese Prime Minister Shinzo Abe a new mandate for his economic and structural reforms.
The euro’s fall came as the ECB downgraded its growth forecast to 0.8 percent this year and 1 percent in the next from 0.9 percent and 1.6 percent respectively.
India’s rupee and Hong Kong’s dollar were the only gainers among the greenback’s 31 major peers this week, adding 0.4 percent and less than 0.1 percent respectively. The ruble fell 6.5 percent to push its annual slump to 38 percent.
In London, the pound rose versus the euro, reaching a three-week high as reports added to evidence that the UK economy is withstanding the stagnation that may lead to more stimulus for the eurozone.
Sterling rose against all but two of its 16 major peers this week as British Chancellor of the Exchequer George Osborne upgraded the UK’s growth forecast for next year in his Autumn Statement on Wednesday.
The pound gained 0.9 percent to ￡0.7888 per euro and fell 0.4 percent against the greenback to US$1.5590, a seventh week of declines.
The pound has gained 5 percent in the past year, the biggest rise after the US dollar among 10 developed nation currencies tracked by Bloomberg Correlation-Weighted Indexes.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
VERTICAL INTEGRATION: The US fabless company’s acquisition of the data center manufacturer would not affect market competition, the Fair Trade Commission said The Fair Trade Commission has approved Advanced Micro Devices Inc’s (AMD) bid to fully acquire ZT International Group Inc for US$4.9 billion, saying it would not hamper market competition. As AMD is a fabless company that designs central processing units (CPUs) used in consumer electronics and servers, while ZT is a data center manufacturer, the vertical integration would not affect market competition, the commission said in a statement yesterday. ZT counts hyperscalers such as Microsoft Corp, Amazon.com Inc and Google among its major clients and plays a minor role in deciding the specifications of data centers, given the strong bargaining power of
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS