The US dollar on Friday rose across the board to hit a four-week high against a basket of currencies, as data showing the COVID-19 pandemic’s continuing toll on the economy boosted demand for the safe-haven currency.
US retail sales fell for a third straight month last month amid job losses and renewed measures to slow the spread of COVID-19, the US Department of Commerce reported on Friday, further evidence that the economy lost speed at the end of last year.
The weak data dragged US Treasury yields lower and US stocks fell as investors turned more risk-averse on Friday.
“I feel that after all the optimism regarding vaccines, we are now living the reality of a very slow [vaccine] rollout, which is weighing heavily on business activity,” said Juan Perez, a senior currency trader at Tempus Inc in Washington.
“Until we have more guarantees on the medical front, markets will not continue to flourish, despite whatever financial aid may be on the way,” Perez said.
US president-elect Joe Biden on Thursday revealed a nearly US$2 trillion proposal to address the COVID-19 pandemic and the economic harm that it has done, which included US$20 billion for vaccine distribution and US$50 billion for testing.
It builds on the US$982 billion COVID-19 relief bill passed last month, more than tripling the funding allocated to state and local governments for vaccine distribution.
The US dollar index was 0.6 percent higher at 90.78, finishing the week up 0.8 percent, its best weekly showing in 11 weeks.
Rising COVID-19 infections also curbed risk appetite, as daily cases in China hit their highest in more than 10 months.
France is to tighten its COVID-19 border controls and bring its curfew forward by two hours, while German Chancellor Angela Merkel said that she wanted “very fast action” to counter the spread of virus variants after Germany had a record number of deaths.
The US dollar’s rebound from three-year lows, which began last week, might have some more room to run if the state of the economy worsens, but the currency’s longer-term outlook remained weak, analysts said.
Data on Friday also showed that US producer prices rose moderately last month, suggesting that an anticipated pickup in inflation in the coming months would probably not be worrisome.
“While short-term, the US dollar could extend further, the big-picture backdrop for the dollar remains negative,” MUFG currency strategist Derek Halpenny wrote in a note to clients.
Despite the recent rise in the US dollar, speculators increased their net short dollar positions in the past week, according to calculations by Reuters and US Commodity Futures Trading Commission data released on Friday.
The deteriorating global risk backdrop sent sterling 0.8 percent lower, although data showing that Britain’s November lockdown was less damaging for the economy than expected kept a floor under the currency.
In Taipei, the New Taiwan dollar dropped against the US dollar, losing NT$0.013 to close at NT$28.480, down 0.08 percent from a week earlier.
Additional reporting by staff writer, with CNA
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last