China yesterday raised the exchange rate for the yuan against the US dollar by 0.92 percent from the previous day, the biggest one-day increase in more than 11 years.
The People’s Bank of China (PBOC), which has been battling to shore up the sagging yuan, fixed it at 6.8668 to the greenback, according to the China Foreign Exchange Trade System, which operates the national foreign exchange market.
The move comes as the yuan had flirted lately with the 7.0 to the dollar mark, a threshold not crossed in more than eight years. China only allows the tightly controlled yuan to rise or fall 2 percent on either side of the daily fix, to prevent volatility in the currency, which is near its lowest levels in eight years. By 7:06am GMT, onshore spot yuan was trading at 6.9334 per US dollar, down 0.7 percent from late Thursday.
GOOD WEEK
The Chinese currency, however, is on track to log its best week in more than a month.
The yuan has been under pressure from uncertainty over the health of the world’s second-largest economy, massive capital outflows seeking better returns abroad, and the sharp rise in the US dollar following Donald Trump’s election as US president and anticipation of further US interest rate hikes.
China’s currency reserves data due this week is also expected to show reserves are close to falling below the critical US$3 trillion figure, which would partly explain the authorities’ desire to stem capital outflows and bets that the currency will keep depreciating.
INTERVENTION
The exchange rate hike was expected by many analysts after a two-day rally in the yuan in offshore trading that sparked speculation of official Chinese intervention in support of the yuan.
“Judging from the speed of the yuan’s appreciation, the PBOC may have intervened to prop up the exchange rate,” Kenix Lai (賴春梅), a Hong Kong-based foreign-exchange analyst at Bank of East Asia Ltd (東亞銀行), told Bloomberg News. “The PBOC is expressing its strong determination to keep the currency stable and is seeking to restore confidence.”
China said last week it would almost double the number of foreign currencies it uses to determine the yuan’s official value, thereby diluting the US dollar’s role, and has imposed a range of measures to curb capital flight abroad.
The equivalent of about US$1 trillion was transferred out of China in 2015 and another US$690 billion in the first 10 months of last year, according to Bloomberg Intelligence estimates.
BYPASSING CHINA TARIFFS: In the first five months of this year, Foxconn sent US$4.4bn of iPhones to the US from India, compared with US$3.7bn in the whole of last year Nearly all the iPhones exported by Foxconn Technology Group (富士康科技集團) from India went to the US between March and last month, customs data showed, far above last year’s average of 50 percent and a clear sign of Apple Inc’s efforts to bypass high US tariffs imposed on China. The numbers, being reported by Reuters for the first time, show that Apple has realigned its India exports to almost exclusively serve the US market, when previously the devices were more widely distributed to nations including the Netherlands and the Czech Republic. During March to last month, Foxconn, known as Hon Hai Precision Industry
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and the University of Tokyo (UTokyo) yesterday announced the launch of the TSMC-UTokyo Lab to promote advanced semiconductor research, education and talent development. The lab is TSMC’s first laboratory collaboration with a university outside Taiwan, the company said in a statement. The lab would leverage “the extensive knowledge, experience, and creativity” of both institutions, the company said. It is located in the Asano Section of UTokyo’s Hongo, Tokyo, campus and would be managed by UTokyo faculty, guided by directors from UTokyo and TSMC, the company said. TSMC began working with UTokyo in 2019, resulting in 21 research projects,
Ashton Hall’s morning routine involves dunking his head in iced Saratoga Spring Water. For the company that sells the bottled water — Hall’s brand of choice for drinking, brushing his teeth and submerging himself — that is fantastic news. “We’re so thankful to this incredible fitness influencer called Ashton Hall,” Saratoga owner Primo Brands Corp’s CEO Robbert Rietbroek said on an earnings call after Hall’s morning routine video went viral. “He really helped put our brand on the map.” Primo Brands, which was not affiliated with Hall when he made his video, is among the increasing number of companies benefiting from influencer
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) yesterday expressed a downbeat view about the prospects of humanoid robots, given high manufacturing costs and a lack of target customers. Despite rising demand and high expectations for humanoid robots, high research-and-development costs and uncertain profitability remain major concerns, Lam told reporters following the company’s annual shareholders’ meeting in Taoyuan. “Since it seems a bit unworthy to use such high-cost robots to do household chores, I believe robots designed for specific purposes would be more valuable and present a better business opportunity,” Lam said Instead of investing in humanoid robots, Quanta has opted to invest
RSS