US dollar bulls have not had the easiest few months.
A gangbusters start to the year saw the US currency rally to multi-year highs versus the euro and yen. Then, it lost steam, giving way to talk of consolidation, retracement and even a correction.
That phase seems to be complete, with the greenback resuming its ascent. It rose for a second week after a jobs report showed unemployment at a seven-year low.
Minutes from the US Federal Reserve due tomorrow may show policymakers moving closer to their first interest-rate increase since 2006.
“The Fed will raise rates in the back half of the year,” said Ernie Cecilia, chief investment officer at Bryn Mawr Trust Co in Bryn Mawr, Pennsylvania, which oversees US$8 billion. “The strength of the dollar will be there, but I don’t think you’re going to get the kind of moves that you had certainly in 2014 or the early part of this year.”
The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 of its major peers, advanced 0.6 percent this week to 1,187.07.
The US currency slipped 0.8 percent to ￥122.86, and rose 0.6 percent versus the euro to US$1.1112, as continued uncertainty on Greece spurred a wave of risk-off sentiment. Greeks head to the polls today to vote on reforms demanded by creditors.
Minutes from the Fed’s June 16-17 meeting may shine more light on how policymakers are evaluating economic indicators as they consider when to raise interest rates this year.
Economic activity has been expanding moderately while job gains have picked up, officials wrote in a statement after their discussion.
A payrolls report July 2 showed US employers added 223,000 jobs last month, slightly less than forecast.
The unemployment rate tumbled to 5.3 percent, while average hourly earnings at private employers held at US$24.95.
Further surveys due next week on the services and non- manufacturing sectors are forecast to show an uptick in the US economy.
“We’re watching the minutes, which should have a more hawkish tone,” New York-based BNP Paribas SA foreign-exchange strategist Vassili Serebriakov said. “Some policymakers were probably leaning toward a rate hike in June and those voices will probably be more prominently displayed in the minutes. It should be helpful for the dollar.”
One hiccup may thwart investors keen to re-establish bets on the dollar: Greece. The nation’s future in the euro area is in question and a disorderly exit from the currency bloc holds the potential for the US to keep rates lower for longer.
The British pound, the developed world’s best- performing currency over the past three months, may get another boost from signs of economic strength.
Even with the prospect of British Chancellor of the Exchequer George Osborne announcing an acceleration of austerity in his special budget tomorrow, data due next week from housing to industrial production will point to an economy that is gaining momentum, analysts said.
Among the major currencies, sterling has been supported by speculation that the Bank of England, which decides on monetary policy next week, will be the first major central bank to raise interest rates after the Federal Reserve.
The pound fell this week for the first time since June 5 versus the euro, having touched the strongest level in more than seven years.
Sterling weakened 0.5 percent this week to ￡0.7129 per euro as of 5:15pm London time on Friday. It touched said ￡0.6989 on Monday, the strongest level since November 2007.
The pound dropped for a second week versus the US dollar, falling 1.1 percent from June 26 to US$1.5580.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS