The US dollar on Friday hovered near a one-month low against a basket of major currencies and posted its biggest weekly drop in five as investors worried that escalating trade tensions could hurt global growth.
The US dollar index, which measures the greenback against a basket of six other major currencies, was down 0.37 percent at 89.48. For the week, it was down 0.8 percent.
China urged the US on Friday to “pull back from the brink” as US President Donald Trump’s plans for tariffs on up to US$60 billion in Chinese goods moved the world’s two largest economies closer to a trade war.
“People seem to be being just a little cautious with so many headlines coming out, and wondering what the next headline could be and how the market is going to react to it,” said Chuck Tomes, senior investment analyst at Manulife Asset Management in Boston.
“Tactically, people are definitely being a little more cautious because of the uncertainties,” he said.
Expectations about shifting policy at global central banks were also injecting an element of uncertainty into currency markets, Tomes said.
Trump’s decision on Thursday to replace H.R. McMaster as US national security adviser with John Bolton, a hawk who has advocated using military force against North Korea and Iran, could also be weighing on sentiment on the margins, Tomes said.
The gap between the three-month US dollar London interbank offered rate and three-month overnight indexed swap rate, a gauge of stress in the US money markets, on Friday climbed to its highest level in nearly nine years, according to Thomson Reuters data.
In Taipei, the New Taiwan dollar on Friday fell against the US dollar, losing NT$0.017 to close at NT$29.170, but it still gained 0.2 against the greenback for the week.
The yen, often viewed as a safe-haven currency in times of market turbulence and economic uncertainty, partly because of the resilience provided by Japan’s current account surplus, rose to a 16-month high against the US dollar.
The greenback was on Friday down 0.34 percent at ￥104.9, down 0.9 percent from last week’s ￥105.9.
“With fears likely to heighten over a trade war negatively impacting global growth, risk aversion could become a dominant market theme moving forward,” Lukman Otunuga, research analyst at futures brokerage FXTM in London, said in a note.
The British pound added 0.4 percent to trade at US$1.4151, bringing weekly gains to 1.49 percent.
The euro rose 0.5 percent against the US dollar for the week.
The Canadian dollar rose against the greenback as oil prices rose and hotter-than-expected domestic inflation data raised the chances of a further Bank of Canada interest rate hike over the coming months.
Additional reporting by staff writer, with CNA
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