The US dollar on Friday rose following a fresh spike in US Treasury yields as the prospect of economies emerging from year-long COVID-19 lockdowns reignited inflation fears.
Market participants have grown wary in the past few weeks that massive fiscal stimulus and pent-up consumer demand could lead to a jump in inflation as expanding vaccination campaigns bring an end to lockdowns.
Data released on Friday showed that US producer prices (PPI) had their largest annual gain in nearly two-and-a-half years, although considerable slack in the labor market could make it harder for businesses to pass the higher costs on to consumers.
The US economy is set to get a massive shot in the arm after US President Joe Biden signed a US$1.9 trillion stimulus bill into law on Thursday and urged US states to make all adults eligible for a COVID-19 vaccine by May 1.
A sell-off in Treasuries overnight continued into the US session, with the yield on the benchmark 10-year note hitting a fresh one-year high of 1.6420 percent, helped by optimism around US economic prospects.
The US dollar was up 0.25 percent to 91.668 against a basket of six major currencies.
The greenback hit an intraday high of 92.506 when yields surged on Tuesday, which was its best since November last year, but recorded three straight days of losses as yields stabilized.
“Bond yields have been in a very strong uptrend, and with the PPI numbers somewhat higher than consensus, that’s contributing to the rise,” BK Asset Management managing director Kathy Lien said.
“That’s widely positive for the dollar, as the greenback has been taking its cues from yields and these new highs are really encouraging more demand for the greenback, especially at a time when you have the ECB [European Central Bank] accelerating bond purchases and being a little bit more dovish,” she said.
The euro was down 0.3 percent at US$1.19505.
Riskier currencies gave back some recent gains on Friday.
The New Taiwan dollar rose against the greenback, gaining NT$0.054 to close at NT$28.187, up 0.31 percent for the week.
The Australian dollar, which is seen as a liquid proxy for risk appetite, fell by 0.35 percent to A$0.77595 versus the US dollar.
The New Zealand dollar was down 0.68 percent against the greenback at NZ$0.7178.
The Norwegian krone lost out to the euro and US dollar.
Additional reporting by CNA, with staff writer
Hon Hai Precision Industry Co (鴻海精密) yesterday said that its research institute has launched its first advanced artificial intelligence (AI) large language model (LLM) using traditional Chinese, with technology assistance from Nvidia Corp. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), said the LLM, FoxBrain, is expected to improve its data analysis capabilities for smart manufacturing, and electric vehicle and smart city development. An LLM is a type of AI trained on vast amounts of text data and uses deep learning techniques, particularly neural networks, to process and generate language. They are essential for building and improving AI-powered servers. Nvidia provided assistance
STILL HOPEFUL: Delayed payment of NT$5.35 billion from an Indian server client sent its earnings plunging last year, but the firm expects a gradual pickup ahead Asustek Computer Inc (華碩), the world’s No. 5 PC vendor, yesterday reported an 87 percent slump in net profit for last year, dragged by a massive overdue payment from an Indian cloud service provider. The Indian customer has delayed payment totaling NT$5.35 billion (US$162.7 million), Asustek chief financial officer Nick Wu (吳長榮) told an online earnings conference. Asustek shipped servers to India between April and June last year. The customer told Asustek that it is launching multiple fundraising projects and expected to repay the debt in the short term, Wu said. The Indian customer accounted for less than 10 percent to Asustek’s
‘DECENT RESULTS’: The company said it is confident thanks to an improving world economy and uptakes in new wireless and AI technologies, despite US uncertainty Pegatron Corp (和碩) yesterday said it plans to build a new server manufacturing factory in the US this year to address US President Donald Trump’s new tariff policy. That would be the second server production base for Pegatron in addition to the existing facilities in Taoyuan, the iPhone assembler said. Servers are one of the new businesses Pegatron has explored in recent years to develop a more balanced product lineup. “We aim to provide our services from a location in the vicinity of our customers,” Pegatron president and chief executive officer Gary Cheng (鄭光治) told an online earnings conference yesterday. “We
LEAK SOURCE? There would be concern over the possibility of tech leaks if TSMC were to form a joint venture to operate Intel’s factories, an analyst said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday stayed mum after a report said that the chipmaker has pitched chip designers Nvidia Corp, Advanced Micro Devices Inc and Broadcom Inc about taking a stake in a joint venture to operate Intel Corp’s factories. Industry sources told the Central News Agency (CNA) that the possibility of TSMC proposing to operate Intel’s wafer fabs is low, as the Taiwanese chipmaker has always focused on its core business. There is also concern over possible technology leaks if TSMC were to form a joint venture to operate Intel’s factories, Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺)
RSS