The New Taiwan dollar yesterday ended down 0.58 percent against the US dollar, as Taiwan became the latest nation to join a regional trend of depreciation, one day after Singapore unexpectedly eased monetary policy to battle deflationary pressures, traders said.
The NT dollar shed NT$0.184 to close at NT$31.512 against the US dollar in Taipei trading, the central bank said on its Web site. Turnover rose to US$1.69 billion, an increase of nearly 30 percent from the US$1.3 billion recorded a day earlier.
“For better or worse, traders cut holdings in the local currency in favor of the US dollar, in line with a region-wide trend,” a currency trader at a local bank said by telephone.
Asian currencies have retreated in the past two days after the Monetary Authority of Singapore (MAS) said on Wednesday it is reducing the slope of its policy band for the Singapore dollar in response to “a significant shift” downward in domestic inflation since its last review in October last year.
The Singapore dollar fell by 1.3 percent against the US dollar, its biggest loss against the greenback since 2010, after the MAS cut its inflation forecast for this year to between minus-0.5 percent and 0.5 percent, from the 0.5 percent to 1.5 percent it had estimated three months earlier.
The adjustment is appropriate for ensuring medium-term price stability in Singapore’s economy, MAS said.
“It is uncommon for the city-state to make such a move” ahead of its regular policy meeting in April, the trader said, adding that downside risks must have heightened and policymakers had to respond.
Last week, the European Central Bank (ECB) said it would introduce quantitative easing in a continued attempt to stimulate the listless eurozone economy.
The ECB stimulus package came as no surprise, but the scale was larger than expected, another trader said.
“Hot money” has since flowed to different parts of the world, boosting Asian stock exchanges and currencies.
Foreign institutional players increased holdings in Taiwanese shares by net NT$166.11 million (US$5.28 million) yesterday, even though the TAIEX fell 0.88 percent to 9426.9, Taiwan Stock Exchange data showed.
A strong currency is unfavorable to exports, especially for trade-dependent nations, and global central banks are very conscious of that, the trader said.
The South Korean, Chinese and Japanese currencies dropped steeply in recent days and Taiwan’s central bank must have taken notice, he said, implying policy intervention in the depreciation of the NT dollar.
Looking forward, the NT dollar might find support at NT$31.3 and resistance at NT$31.7 toward the lunar New Year in mid-February, the traders said.
The trading volume might taper off going forward, as investors do not like to hold funds in a market over the holidays, they said.
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS