The US dollar index hit an almost three-month low on Friday after strong economic data from China pushed investors toward riskier currencies and equity markets extended their rally.
The US dollar has fallen more than 2 percent so far this month after Democratic US president-elect Joe Biden’s election victory and positive COVID-19 vaccine progress, which has reduced demand for safe havens.
New Zealand’s dollar hit its highest level in more than three years, while the Australian dollar scaled September levels after data showed that profits at China’s industrial firms last month grew at their quickest pace since early 2017.
In Taipei, the New Taiwan dollar ended the day unchanged against the US dollar at NT$28.811, little changed from last week’s NT$28.820.
The British pound declined against the euro as the EU and the UK said substantial differences remained over a Brexit trade deal as the EU chief negotiator prepared to travel to London in a last-ditch attempt to avoid a tumultuous finale to the five-year Brexit crisis.
Along with the data and Brexit headlines, Erik Bregar, head of foreign exchange strategy at Exchange Bank of Canada in Toronto, cited month-end selling of the US dollar as investors balance portfolios after solid monthly gains for equities.
“There’s been talk all week that the US dollar will see waves of selling going into Monday,” said Bregar, who also noted “dollar selling into the London fix every day this week.”
However, with many US traders still on vacation a day after Thursday’s Thanksgiving holiday, thinner trading volume was likely exaggerating the US dollar move, CIBC Capital Markets North America head of foreign exchange strategy Bipan Rai said.
“It started with the impressive industrial profits data in China and that’s translating into what is a very patchy backdrop for liquidity in the North American time zone,” Rai said.
However, “over the longer term this is probably the right trend for the dollar. We think the dollar has further room to the downside,” he added.
The US dollar fell 0.23 percent against a basket of major currencies to 91.78, down 0.7 percent for the week and the lowest since Sept. 1.
However, it stopped short of hitting the September low of 91.737, which was last reached in April 2018.
The Australian dollar — seen as a proxy for risk along with other commodity currencies like the New Zealand dollar and the Canadian dollar — was up 0.41 percent.
Sterling was down 0.45 percent against the US dollar and the euro was up 0.78 percent against the British currency.
Citing Brexit, Scottish First Minister Nicola Sturgeon said that an independence vote should take place in the earlier part of the devolved parliament’s next term, which begins next year.
The euro was up 0.39 percent against the US dollar at US$1.1952, barely reacting to downbeat comments from the European Central Bank’s chief economist Philip Lane on Thursday.
Additional reporting by CNA, with staff writer
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to