The New Taiwan dollar yesterday slid past a key psychological level of NT$30 per US dollar in the morning session for the first time since June 2020, as a double whammy of heightened geopolitical risks and weaker economic growth weigh on the currency.
The currency fell as much as 0.2 percent to NT$30.008 per US dollar. That is because sentiment turned cautious amid US House Speaker Nancy Pelosi’s potential visit to Taiwan and as data showed manufacturing activity was the weakest since May 2020.
“There may be some political risk priced into the Taiwan dollar due to Pelosi’s visit to Asia,” said Khoon Goh (吳昆), head of Asia research at Australia & New Zealand Banking Group.
Photo: Chen Mei-ying, Taipei Times
“This is the main reason why the Taiwan dollar has underperformed in the region despite the greenback being weaker,” he said, adding that the surprise drop in Taiwan’s purchasing managers’ index further into contraction territory also probably weighed on the currency.
The NT dollar retraced some of its early loss to close at NT$29.98 per US dollar in Taipei trading yesterday.
However, the downside risk for the currency is high as indicated by its one-month implied volatility, which has risen in the past four sessions from a five-month low touched last week.
Pelosi left Taiwan out of the itinerary in a statement on Sunday announcing the trip, which is to also include stops in Japan, South Korea and Malaysia. Yet speculation is still rife that Pelosi would visit Taiwan at some point this week, risking a heavy-handed response from China.
“The underperformance in the Taiwan dollar is reflecting heightened geopolitical risk, rather than fundamentals,” Frances Cheung (張淑嫻), rates strategist at Oversea-Chinese Banking Corp in Singapore. “Unfortunately this kind of sentiment appears to be self-fulfilling in that the resulting equity outflows are putting pressure on the local currency.”
ING Bank NV has a bearish outlook on the NT dollar based on fundamentals and weak demand for semiconductors.
“That’s driven mainly from weak demand for smart devices due to lower purchasing power in China and high inflation in US and Europe,” ING chief China economist Iris Pang (彭藹嬈) said.
To many, Tatu City on the outskirts of Nairobi looks like a success. The first city entirely built by a private company to be operational in east Africa, with about 25,000 people living and working there, it accounts for about two-thirds of all foreign investment in Kenya. Its low-tax status has attracted more than 100 businesses including Heineken, coffee brand Dormans, and the biggest call-center and cold-chain transport firms in the region. However, to some local politicians, Tatu City has looked more like a target for extortion. A parade of governors have demanded land worth millions of dollars in exchange
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue jumped 48 percent last month, underscoring how electronics firms scrambled to acquire essential components before global tariffs took effect. The main chipmaker for Apple Inc and Nvidia Corp reported monthly sales of NT$349.6 billion (US$11.6 billion). That compares with the average analysts’ estimate for a 38 percent rise in second-quarter revenue. US President Donald Trump’s trade war is prompting economists to retool GDP forecasts worldwide, casting doubt over the outlook for everything from iPhone demand to computing and datacenter construction. However, TSMC — a barometer for global tech spending given its central role in the
An Indonesian animated movie is smashing regional box office records and could be set for wider success as it prepares to open beyond the Southeast Asian archipelago’s silver screens. Jumbo — a film based on the adventures of main character, Don, a large orphaned Indonesian boy facing bullying at school — last month became the highest-grossing Southeast Asian animated film, raking in more than US$8 million. Released at the end of March to coincide with the Eid holidays after the Islamic fasting month of Ramadan, the movie has hit 8 million ticket sales, the third-highest in Indonesian cinema history, Film
RSS