The US dollar declined on Friday, along with US Treasury yields, while investors looked ahead to next week’s US Federal Reserve meeting for more clarity on the outlook for rate hikes.
Expectations that the Fed will tighten monetary policy at a faster pace than previously anticipated had driven a rise in yields and the US dollar earlier this week.
US Treasury yields fell as stock market declines reflected poor risk appetite, while concerns about potential conflict in Ukraine drove demand for the safe-haven debt.
Markets are pricing in as many as four rate hikes this year, starting from March and expect the Fed to start trimming its US$8 trillion-plus balance sheet within months.
Next week’s Fed meeting could shed some light on how fast it will tighten.
“Everything is going to be somewhat calm” until the Fed releases its statement on Wednesday after the two-day meeting, said Bipan Rai, North American head of foreign exchange strategy at CIBC Capital Markets in Toronto. “It makes sense the dollar is somewhat muted today given the lack of real impetus from the data front.”
In Taipei, the New Taiwan dollar yesterday rose against the greenback, gaining NT$0.002 on a make-up day for the Lunar New Year holiday to close at NT$27.700, down 0.3 percent for the week.
The US dollar index, which tracks the greenback against major peers, was down 0.1 percent on the day at 95.650, but up 0.5 percent for the week.
Against the yen, the dollar was down 0.4 percent at ￥113.680. For the week, the US dollar was down about 0.5 percent against the yen.
The euro was up 0.3 percent against the US dollar at US$1.1341, while it was down about 0.6 percent for the week.
The pound weakened broadly on Friday, pulling back from a 23-month high versus the euro touched in the previous session as weakness in Wall Street prompted investors to take profits after a rally this week.
Against the US dollar, the pound eased 0.24 percent at US$1.3560, its lowest level in more than a week.
Versus the euro, the pound weakened 0.6 percent at ￡0.8364, moving away from a February 2020 high of ￡0.8307 tested on Thursday.
Traders have pushed the pound higher on expectations the Bank of England would raise interest rates as early as next month to combat soaring inflation.
Money markets price in more than 100 basis points (bps) in interest rate rises this year and an 87 percent chance of a 25 bps increase in February, after data showed on Wednesday that UK inflation last month rose faster than expected to its highest in nearly 30 years.
Another factor weighing on the pound was weak retail sales data. British retail sales slumped last month after consumers did much of their Christmas shopping earlier than usual in November.
Additional reporting by CNA, with staff writer
INVENTORY DOUBLED: Key parts have backed up in warehouses, halting notebook production, as Acer’s CEO said that a gradual reopening would not solve the problem PC vendor Acer Inc (宏碁) yesterday said that lockdowns in China to control COVID-19 upended key component supply and disrupted PC production, although chip shortages have been improving. While chip supply constraints largely eased in the first quarter, the company faces uneven supplies of key components due to COVID-19 restrictions in China, Acer chairman and CEO Jason Chen (陳俊聖) told an online news conference. “Semiconductor shortage was the biggest problem in the first half of last year,” Chen said. “Now, we are beset by a supply chain issue caused by China's lockdowns.” With key components unable to be delivered and backing up in
Hotai Motor Co (和泰汽車), which distributes Toyota and Lexus vehicles in Taiwan, yesterday introduced Toyota Motor Corp’s first all-electric sports utility vehicle (SUV), the bZ4X, joining rivals in vying for a share of the nation’s fast-growing electric vehicle market. Starting today, the bZ4X, with a price tag of NT$1.599 million (US$53,780), would be available for online purchase only and customers need to download a special app to place orders, Hotai said. Hotai has received 300 of the electric SUVs, it said, adding that it is not enough to meet robust market demand. A total of 229 electric vehicles were sold in the
Hon Hai Precision Industry Co (鴻海精密) has made further progress in its expansion into semiconductor manufacturing as its subsidiary teams up with Dagang NeXchange Bhd (DNeX) to build a 12-inch wafer fab in Malaysia. Big Innovation Holdings Ltd (BIH), a wholly owned subsidiary of Hon Hai, has inked a memorandum of understanding (MOU) with DNeX to collaborate on establishing and operating the semiconductor fab in the Southeastern Asian country, it said in a statement released by DNeX on its Web site. The fab is expected to produce 40,000 12-inch wafers per month, deploying 28-nanometer and 40-nanometer process technologies, the statement said. Under
E Ink Holdings Inc (元太科技) yesterday said it would further expand capacity to cope with robust demand for e-paper displays used in e-readers, e-notes and electronic shelf labels, as the COVID-19 pandemic and rising inflation have not dampened consumer demand. Although rising inflation is weakening companies’ purchasing power, E Ink said that its customers have not scaled down orders for e-paper displays used in e-readers. “Reading is still the most affordable leisure activity that people have,” E Ink CEO Johnson Lee (李政昊) told an online investors’ conference in Taipei. As e-books are less expensive than paper books, “we have so far not seen