The New Taiwan dollar on Friday rose against the US dollar, gaining NT$0.067 to close at NT$29.523.
Turnover totaled US$764 million during the trading session.
The greenback opened at the day’s high of NT$29.600 and moved to a low of NT$29.476 before rebounding.
For the week, the NT dollar gained NT$0.248 from a close of NT$29.848 on Dec. 29 last year, an increase of 0.8 percent.
Elsewhere on Friday, the euro held near four-month highs as eurozone inflation data printed modestly, in line with forecasts.
However, sentiment remained bullish, with some investors betting the European Central Bank (ECB) might have to start withdrawing its stimulus policies earlier than expected as the bloc’s economy strengthens.
Prices last month rose 1.4 percent year-on-year, or 10 basis points slower than in November last year due to smaller increases in food and energy prices.
With the US dollar failing to draw any strength from this week’s manufacturing and private payrolls data and two US interest rate hikes already baked into market expectations, traders believe there is more upside for the euro.
Last month’s eurozone inflation data underlined that price pressures will have to pick up meaningfully in the bloc before the ECB starts to withdraw policy stimulus rapidly.
“Any rate debate at the ECB is unlikely to be very lively, even if GDP growth is healthy,” HSBC strategists wrote in an outlook note.
On Friday, the euro was broadly steady at US$1.2060, just shy of a high of US$1.2092 in September last year and on track for a third consecutive week of gains.
A break above that level would take the single currency to its highest since January 2015.
Any near-term shift in the ECB’s policy stance would be a surprise for financial markets, which expect policymakers to wind down their bond purchases later in the year.
“Currency markets broadly know what the [US Federal Reserve] is going to do this year, but the ECB monetary policy may be the surprise package of 2018,” SEB senior foreign exchange strategist Richard Falkenhall said in Stockholm.
Money markets expect the Fed to raise interest rates two times this year, compared with a Fed forecast of three times.
In contrast, markets do not expect any change in interest rates in Europe until next year, although some of those expectations might have been slightly brought forward over the past few days after comments by senior ECB policymakers.
The ECB might end its stimulus program this year if the eurozone economy continues to grow strongly, ECB Governing Council member Ewald Nowotny told a German newspaper.
“Market participants might bank on the ECB following in the Fed’s footsteps earlier after all if the economic environment improves further, which would be a reason to prefer the euro over the [US] dollar,” Commerzbank AG strategists said in a note.
Weighed down by its weakness against the euro, the US dollar’s index against a basket of six major currencies was poised for a loss of 0.3 percent this week.
It probed a three-month low of 91.751 on Tuesday and stood at 91.996, headed for its third week of losses.
The US currency’s lack of traction was highlighted overnight as it failed to draw support from a stronger-than-expected jobs report.
US private employers last month added 250,000 jobs, ADP Research Institute data showed, the biggest monthly increase since March last year.
Also weighing on the US dollar was a renewed flattening of the US yield curve with the spread of 10-year US Treasuries over two-year debt falling to less than 50 basis points, its lowest in more than a decade.
Additional reporting by staff writer
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
TECH COMPETITION: The US restricted sales of two dozen types of manufacturing equipment and three software tools, and blacklisted 140 more Chinese entities US President Joe Biden’s administration unveiled new restrictions on China’s access to vital components for chips and artificial intelligence (AI), escalating a campaign to contain Beijing’s technological ambitions. The US Department of Commerce slapped additional curbs on the sale of high-bandwidth memory (HBM) and chipmaking gear, including that produced by US firms at foreign facilities. It also blacklisted 140 more Chinese entities that it accused of acting on Beijing’s behalf, although it did not name them in an initial statement. Full details on the new sanctions and Entity List additions were to be published later yesterday, a US official said. The US “will
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
COLLABORATION: The operations center shows the close partnership between Taiwan and Japan in the field of semiconductors, Minister of Economic Affairs J.W. Kuo said Tokyo Electron Ltd, Asia’s biggest semiconductor equipment supplier, yesterday launched a NT$2 billion (US$61.5 million) operations center in Tainan as it aims to expand capacity and meet growing demand. Its new Taiwan Operations Center is expected to help customers release their products faster, boost production efficiency and shorten equipment repair time in a cost-effective way, the company said. The center is about a five-minute drive from the factories of its major customers such as Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) advanced 3-nanometer and 2-nanometer fabs. The operations center would have about 1,000 employees when it is fully utilized, the company
RSS