With foreign investors moving their funds out of the nation, the New Taiwan dollar on Friday fell against the US dollar, shedding NT$0.110 to close at NT$30.812, dealers said.
The fund exodus reflected fears that the US Federal Reserve turned hawkish on monetary policy after a two-day policymaking meeting concluded overnight, they said.
The weakness of the NT dollar against the US dollar also reflected a sell-off on the local equity market on Friday, when foreign institutional investors stood on the sell side, they added.
For the week, the US dollar rose NT$0.074, or 0.24 percent, to its highest since Thursday last week, when the greenback closed at NT$30.926.
On Friday, the unit opened at NT$30.750 and moved between NT$30.735 and NT$30.813 before the close of trading. Turnover totaled US$767 million in the session.
The US dollar staged a rebound soon after the local foreign exchange market opened, but the gains were moderate in the morning session, dealers said.
However, selling of the NT dollar escalated in the afternoon, with local traders motivated by the losses incurred by other regional currencies to sell the local currency amid fears the Fed would accelerate its rate hike cycle, they said.
In particular, the South Korea won, which the NT dollar follows closely, fell 1.03 percent against the US dollar, prompting traders to dump the local currency as foreign investors moved more funds out of the region amid concerns over the Fed’s rate hike, they added.
On Thursday, the Fed left its key interest rates unchanged, but said the US economy remained on track to recovery.
“The labor market has continued to strengthen and ... economic activity has been rising at a strong rate,” the Fed said in a statement, which dealers called a more hawkish view on monetary policy.
In addition, foreign institutional investors cut their holdings in local equities, which also increased the downward pressure on the NT dollar and boosted the US dollar further, dealers said.
The US dollar on Friday also rose toward a 16-month high against the euro.
The greenback had on Tuesday fallen broadly following US midterm elections on expectations that the outcome would make further fiscal stimulus measures unlikely.
However, the currency bounced back and on Friday returned to outperforming most major currencies, underpinned by the robust US economy and rising interest rates.
“We’re wary of selling the [US] dollar too soon, because the Fed is still hiking rates into a tightening labor market and trade tensions haven’t gone away,” Societe Generale SA chief foreign exchange strategist Kit Juckes said.
The Fed is widely anticipated to raise interest rates next month, with traders’ expectations at 75.8 percent, compared with 71.1 percent on Thursday, CME Group Inc’s FedWatch tool showed.
Renewed strength in the US dollar — which tends to be boosted by trade war tensions, as it is considered a safe-haven asset — is pushing the offshore Chinese yuan toward 7 yuan per US dollar and has seen the euro slip toward US$1.13.
In foreign exchange markets, investor focus is shifting back to the divergence between the monetary policies of the US and other major economies.
In Japan, where interest rates are expected to stay extremely low, the yen is near a five-week low against the US dollar, last at ￥113.84, and has fallen 1.7 percent over the past 10 trading sessions.
The US dollar index, which tracks the currency against six major peers, on Friday traded as high as 96.916, not far from a 16-month peak of 97.2 touched on Oct. 31.
The euro last traded at US$1.135, down 0.12 percent.
The single currency on Thursday fell after the European Commission forecast that the Italian economy would grow more slowly than Rome has predicted in the next two years, leading to much bigger budget deficits than assumed by the government.
A standoff between the EU and Rome over the budget deficit and concerns over the bloc’s slowing economic growth have dragged on the euro, which has fallen 4.2 percent versus the US dollar over the past six months.
Sterling changed hands at US$1.304, down 0.14 percent.
The British currency has benefited from growing investor expectations that Britain is close to reaching a deal with the EU, less than five months before it is due to exit the bloc.
FALLING BEHIND: Samsung shares have declined more than 20 percent this year, as the world’s largest chipmaker struggles in key markets and plays catch-up to rival SK Hynix Samsung Electronics Co is laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce its global headcount by thousands of jobs, sources familiar with the situation said. The layoffs could affect about 10 percent of its workforces in those markets, although the numbers for each subsidiary might vary, said one of the sources, who asked not to be named because the matter is private. Job cuts are planned for other overseas subsidiaries and could reach 10 percent in certain markets, the source said. The South Korean company has about 147,000 in staff overseas, more than half
TECH PARTNERSHIP: The deal with Arizona-based Amkor would provide TSMC with advanced packing and test capacities, a requirement to serve US customers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is collaborating with Amkor Technology Inc to provide local advanced packaging and test capacities in Arizona to address customer requirements for geographical flexibility in chip manufacturing. As part of the agreement, TSMC, the world’s biggest contract chipmaker, would contract turnkey advanced packaging and test services from Amkor at their planned facility in Peoria, Arizona, a joint statement released yesterday said. TSMC would leverage these services to support its customers, particularly those using TSMC’s advanced wafer fabrication facilities in Phoenix, Arizona, it said. The companies would jointly define the specific packaging technologies, such as TSMC’s Integrated
An Indian factory producing iPhone components resumed work yesterday after a fire that halted production — the third blaze to disrupt Apple Inc’s local supply chain since the start of last year. Local industrial behemoth Tata Group’s plant in Tamil Nadu, which was shut down by the unexplained fire on Saturday, is a key linchpin of Apple’s nascent supply chain in the country. A spokesperson for subsidiary Tata Electronics Pvt yesterday said that the company would restart work in “many areas of the facility today.” “We’ve been working diligently since Saturday to support our team and to identify the cause of the fire,”
Sales RecORD: Hon Hai’s consolidated sales rose by about 20 percent last quarter, while Largan, another Apple supplier, saw quarterly sales increase by 17 percent IPhone assembler Hon Hai Precision Industry Co (鴻海精密) on Saturday reported its highest-ever quarterly sales for the third quarter on the back of solid global demand for artificial intelligence (AI) servers. Hon Hai, also known as Foxconn Technology Group (富士康科技集團) globally, said it posted NT$1.85 trillion (US$57.93 billion) in consolidated sales in the July-to-September quarter, up 19.46 percent from the previous quarter and up 20.15 percent from a year earlier. The figure beat the previous third-quarter high of NT$1.74 trillion recorded in 2022, company data showed. Due to rising demand for AI, Hon Hai said its cloud and networking division enjoyed strong sales
RSS