The US dollar fell across the board for a second straight day on Friday, as investors favored riskier currencies following signs US inflation is cooling that boosted the case for the US Federal Reserve to ease off its hefty interest rate hikes.
Friday’s US dollar weakness was an extension of the move set off after Thursday’s data showed US consumer inflation last month rose 7.7 percent year-on-year, its slowest rate since January and below forecasts of 8 percent.
Against a basket of currencies, the dollar was down about 3.8 percent over two sessions, on pace for its largest two-day percentage loss since March 2009.
The US currency’s long rally over the past two years had drawn a host of US dollar bulls leading to crowded positioning, and Thursday’s data left a lot of them looking for a quick exit, strategists said.
“It’s not just short-term trend-followers, momentum players having to get out of positions, but some long-term structural long dollar positions have to be unwound,” Bannockburn Global Forex chief market strategist Marc Chandler said.
The US dollar index dropped 1.79 percent to 106.42 and lost 4.02 percent from a week earlier.
The New Taiwan dollar on Friday rose against the US dollar, gaining NT$0.495, to close at NT$31.410. The NT dollar gained 2.30 percent from a week earlier.
The US dollar fell 1.7 percent against the yen to ￥138.55, while the euro advanced 1.46 percent against the greenback to US$1.036.
“The dollar is one of those markets that is extreme in its overvaluation — there is a strong chance we have seen the peak,” Janus Henderson Investors fixed income global head Jim Cielinski said.
Still, some strategists said that US dollar bears remain vulnerable to a possible near-term rebound.
“Yes, more people have become convinced the dollar has peaked, but the move has been so sharp that I caution people against chasing it,” Chandler said.
The US dollar found little support from survey data, which showed US consumer sentiment fell this month, pulled down by persistent worries about inflation and higher borrowing costs.
The risk-sensitive Australian and New Zealand dollars advanced 1.4 percent and 1.6 percent respectively against the greenback.
Investor risk appetite got an additional boost from health authorities in Beijing, which eased some of China’s strict COVID-19 restrictions, including shortening quarantine times for close contacts of COVID-19 cases and inbound travellers.
The pound rose 1.22 percent against the US dollar to US$1.1853 after British government data showed that the economy did not contract as much as expected in the three months to September, although it is still entering what is likely to be a lengthy recession.
The US dollar was 2.4 percent lower against the Swiss franc at SF0.94025 after Swiss National Bank Chairman Thomas Jordan on Friday said the bank was prepared to take “all measures necessary” to bring inflation back down to its zero to 2 percent target range.
Additional reporting by CNA, with staff writer
SEEKING ENGINEERS: The Dutch chipmaking equipment supplier is planning to hire 2,000 workers for a planned campus in New Taipei City’s Linkou District Dutch chipmaking equipment supplier ASML Holding NV is planning to offer NT$1.6 million (US$51,331) or more in starting annual pay to engineers with a master’s degree at its sites in Taiwan. The major supplier to contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) said it is keen to offer competitive compensation comprised of salaries, bonuses and other financial incentives as it seeks to expand its talent pool in Taiwan. The company, which is planning to build a plant in New Taipei City, said engineers would in their first year be granted 10 days annual leave, compared with the minimum of three days
Two US Federal Reserve officials reinforced expectations the central bank would slow their pace of interest rate increases next month, even as they stressed the need to keep tightening. San Francisco Fed President Mary Daly and Cleveland Fed President Loretta Mester said during separate remarks on Monday that inflation remains too high and policymakers have a way to go before completing their tightening campaign. However, they both characterized the need for officials to be judicious as they calibrate policy. “I think we can slow down from the 75 at the next meeting, I don’t have a problem with that,” Mester said during
‘SEASONED’: Chiang Shang-yi is to help guide Hon Hai’s global semiconductor development strategy as the firm accelerates the pace of capacity deployment Hon Hai Technology Group (鴻海科技集團) has hired former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) cochief operating officer Chiang Shang-yi (蔣尚義) as a strategy officer to assist its semiconductor business development, the group said yesterday. Chiang’s appointment took effect immediately. He is to report directly to Hon Hai chairman Young Liu (劉揚偉). Chiang was the central figure in TSMC’s technology advancement, and once considered a potential successor to TSMC founder and former chairman Morris Chang (張忠謀). He spent the past few years in China assisting Chinese chipmakers Semiconductor Manufacturing International Corp (中芯國際) and Wuhan Hongxin Semiconductor Corp (武漢弘芯半導體). Chiang on Oct. 18 attended a
PRIORITY SHIFT: TSMC previously said it would build two new fabs in Kaohsiung, but earlier this month said it was postponing construction of a 7-nanometer factory Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said that construction of a factory in Kaohsiung to produce 28-nanometer chips is under way, with mass production set to start in 2024. TSMC, the world’s largest contract chipmaker, made the announcement after reports about the company’s capacity expansion plans in Kaohsiung. Industry insiders said that TSMC on Friday awarded the contract to build the new fab to Fu Tsu Construction Co (互助營造). The chipmaker, a major Apple Inc supplier, did not directly respond to the reports, saying only that construction had started following the completion of land grading. TSMC previously said it intended to build a