The US dollar index lost some ground on Friday after US consumer prices increased roughly in line with expectations last month as investors, who had feared a much higher inflation reading, bet that the actual number would not change the pace of interest rate hikes.
In Taipei, the New Taiwan dollar fell against the greenback, losing NT$0.027 to close at NT$27.737 per US dollar, little changed from last week’s NT$27.723.
US Department of Labor data showed an increasing consumer price index (CPI) as the cost of goods and services rose broadly amid supply constraints for the largest annual gain since 1982.
The CPI rose 0.8 percent last month after surging 0.9 percent in October, while in the 12 months through last month, it rose 6.8 percent, following a 6.2 percent advance in October. This compared with a 0.7 percent forecast from economists polled by Reuters.
“Coming into the report, there was some concern it might have been a little hotter,” TD Securities senior foreign exchange strategist Mazen Issa said. “Given how the dollar traded ahead of the report, this is more of a relief rally from the other currencies.”
Investors had been watching for a higher-than-consensus inflation reading and the possibility that such a reading would lead the US Federal Reserve to signal a faster-than expected pace of interest rate hikes after the next Federal Open Market Committee (FOMC) meeting, which ends on Wednesday.
“Today isn’t going to change the message for next week. We’re going to see a hawkish Fed. We’re going to see a dot plot that moves higher,” Issa said.
With the US dollar index up almost 7 percent for the year-to-date, Issa said that “a lot has already priced in,” but with overseas central banks looking less hawkish than the Fed, there was no credible alternative for currency investors.
“It’s going to be hard to fade the dollar in the face of what’s projected to be elevated inflation at least through to early second quarter. That’s the challenge,” he said.
Against a basket of its rivals, the US dollar went into negative territory after the CPI news and fell further as the day wore on with some trading choppiness.
The index fell 0.23 percent to 96.05, down 0.07 percent for the week.
The US dollar was down 0.02 percent against Japan’s yen on Friday.
The British pound inched up on Friday after the greenback lost ground after the US inflation data. Sterling was last trading up 0.28 percent at US$1.3257.
The euro was up 0.17 percent at US$1.1312.
While Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets, said that the foreign exchange market had positioned for a higher inflation reading, he was less bullish about the dollar for the rest of the year.
Additional reporting by CNA, with staff writer
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts