ELECTRONICS
Hon Hai starts building
Construction of Hon Hai Precision Industry Co’s (鴻海精密) flat-panel factory in Wisconsin started on Saturday, with all of the preliminary work assigned to contract companies based in the state, the firm said in a joint statement with contractor Gilbance Building Co. About 10 percent of the contract companies are based in Racine, Hon Hai said. Gilbance vice president Adam Jelen said that 25 to 30 companies in Wisconsin would be involved in the preliminary work, which is expected to cost about US$100 million and create 800 jobs. Hon Hai said it plans to hold a groundbreaking ceremony in a few months.
CONSUMPTION
Sentiment falls 0.97 points
Consumer confidence weakened this month, with sentiment toward employment displaying the sharpest decline, a survey released on Friday last week by National Central University showed. The consumer confidence index fell 0.97 points from a month earlier to 86.89, it showed. Research Center for Taiwan Economic Development director Dachrahn Wu (吳大任) said that consumer confidence remained moderate, despite slight declines in all six sub-indices.
BANKING
Housing loans hit new high
Local banks’ outstanding housing loans last month grew to a record-high NT$6.699 trillion (US$226 billion), with annual growth of 4.71 percent, the largest expansion in 16 months, the central bank said on Wednesday last week. Housing loans have increased by NT$20 billion to NT$30 billion every month since November last year, indicating steady recovery, the bank said. Meanwhile, construction loans grew 4.48 percent from a year earlier to NT$1.733 trillion, it said.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
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