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
UNSTABLE? Downplaying geopolitical concerns, Mark Liu said that Taiwan can help usher in a bright, new era for the chip industry with its tech and manufacturing skills There are probably not many people who believe that Taiwan is unstable because of geopolitical factors, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) said yesterday in Taipei in response to comments by Intel’s top executive. Intel CEO Pat Gelsinger on Wednesday told the Fortune Brainstorm Tech summit in California that the US government should support a sustainable semiconductor supply chain in the US, in part because “Taiwan is not a stable place.” With China sending 27 military warplanes into Taiwan’s air defense identification zone on Sunday, Gelsinger asked: Does that “make you more comfortable or less if you’re now
Toyota Motor Corp is to launch an all-electric small sedan in China late next year, having turned to local partner BYD Co (比亞迪) for key technology to finally make an affordable yet roomy runaround, four sources said. Two of the four people with knowledge of the matter described the car as an electric holy grail for Toyota, which has struggled for years to come up with a small electric vehicle (EV) that is competitive on cost in China and does not compromise on comfort. The sources said the breakthrough was chiefly down to BYD’s less bulky lithium-iron-phosphate (LFP) Blade batteries and its
Danish wind turbine maker Vestas A/S yesterday said it has invested NT$1 billion (US$36.07 million) in its local supply chain to supply components for its 9.5 megawatt (MW) V174 turbine. The project has helped created 1,500 jobs, including 150 jobs by Vestas itself, Vestas country manager Alex Robertson said. The turbine is to be used in four offshore wind farm projects for a total of 123 wind turbine generators, or 1.2 gigawatts (GW) of total capacity, he said. “This is localization like I’ve never seen before,” Robertson told a media briefing in Taipei. Vestas highlighted 10 Taiwanese supply chain partners that are
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and integrated circuit designer MediaTek Inc (聯發科) are optimistic about the “metaverse” concept, expecting it to create major opportunities for the semiconductor industry. At a tech forum last week to commemorate former finance minister K.T. Lee (李國鼎), who has been dubbed the father of Taiwan’s economic miracle and who helped build Taiwan’s semiconductor sector in the second half of the 20th century, TSMC chairman Mark Liu (劉德音) said he expects the metaverse to grow quickly in the next decade. Over the next 10 years, data computing power and transmission speeds are forecast to increase
RSS