The US dollar on Friday rose against the euro and sterling, to reach its biggest weekly gain since February, as investors shifted to safe havens after consumer sentiment data fueled concern about the US debt ceiling and monetary policy.
A University of Michigan survey on Friday showed that May US consumer sentiment slumped to a six-month low on worries that a political dispute over raising the federal government’s borrowing cap could trigger a recession.
Consumers’ long-term inflation expectations rose to their highest since 2011. That could influence the US Federal Reserve, which signaled last week that it could pause its interest-rate hikes.
Photo: EPA-EFE
“Rate differentials are continuing to tilt in the dollar’s favor,” said Karl Schamotta, chief market strategist of Corpay in Toronto. “The surprises in the University of Michigan consumer sentiment survey are painting sort of a stagflationary picture for the US economy, and one that could justify another rate hike at the June Fed meeting, but certainly will diminish odds of rate cuts in the latter half of the year.”
Data also showed US consumer price index inflation cooling to 4.9 percent year-on-year last month. Moreover, weekly jobless claims rose more than expected, but the labor market remains tight, with 1.6 job openings for every unemployed person in March, well above the 1-1.2 range consistent with a market not generating too much inflation.
US Fed Governor Michelle Bowman said that the central bank would probably need to raise rates further if inflation stays high.
The pound fell 0.5 percent to US$1.2448, while the euro weakened 0.59 percent to US$1.0853, a day after falling to a one-month low.
That left the dollar index up 0.63 percent at 102.71, notching a weekly gain of 1.47 percent — its biggest weekly rise since February.
The New Taiwan dollar fell against the US dollar, losing NT$0.020 to close at NT$30.758, down 0.38 percent from NT$30.641 last week.
Joe Manimbo, senior market analyst at Convera, said that elevated US inflation spurred some skepticism about the Fed’s year-end rate cuts, and that the view that other central banks might be closer to pausing rate hikes as well has weighed on European currencies.
“Dollar gains this week have been multidimensional. The buck has served as a safe harbor from worries about a weak Chinese economy and volatility on Wall Street,” Manimbo wrote. “While stronger, it’s too soon to tell whether the dollar’s run of weakness has turned the corner. Markets would need to take rate cuts off the table to lend meaningful upside traction to the greenback.”
Additional reporting by staff writer, with CNA
AI REVOLUTION: The event is to take place from Wednesday to Friday at the Taipei Nangang Exhibition Center’s halls 1 and 2 and would feature more than 1,100 exhibitors Semicon Taiwan, an annual international semiconductor exhibition, would bring leaders from the world’s top technology firms to Taipei this year, the event organizer said. The CEO Summit is to feature nine global leaders from Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), ASE Technology Holding Co (ASE, 日月光投控), Applied Materials Inc, Google, Samsung Electronics Co, SK Hynix Inc, Microsoft Corp, Interuniversity Microelectronic Centre and Marvell Technology Group Ltd, SEMI said in a news release last week. The top executives would delve into how semiconductors are positioned as the driving force behind global technological innovation amid the artificial intelligence (AI) revolution, the organizer said. Among them,
When she was in fifth grade, Scarlett Goddard Strahan started to worry about getting wrinkles. By the time she turned 10, she and her friends were spending hours on ByteDance Ltd’s TikTok and Google’s YouTube watching influencers tout products for achieving today’s beauty aesthetic: a dewy, “glowy,” flawless complexion. Goddard Strahan developed an elaborate skin care routine with facial cleansers, mists, hydrating masks and moisturizers. One night, her skin began to burn intensely and erupted in blisters. Heavy use of adult-strength products had wreaked havoc on her skin. Months later, patches of tiny bumps remain on her face, and her cheeks turn
Former Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Mark Liu (劉德音) yesterday warned against the tendency to label stakeholders as either “pro-China” or “pro-US,” calling such rigid thinking a “trap” that could impede policy discussions. Liu, an adviser to the Cabinet’s Economic Development Committee, made the comments in his keynote speech at the committee’s first advisers’ meeting. Speaking in front of Premier Cho Jung-tai (卓榮泰), National Development Council (NDC) Minister Paul Liu (劉鏡清) and other officials, Liu urged the public to be wary of falling into the “trap” of categorizing people involved in discussions into either the “pro-China” or “pro-US” camp. Liu,
Minister of Economic Affairs J.W. Kuo (郭智輝) yesterday said Taiwan’s government plans to set up a business service company in Kyushu, Japan, to help Taiwanese companies operating there. “The company will follow the one-stop service model similar to the science parks we have in Taiwan,” Kuo said. “As each prefecture is providing different conditions, we will establish a new company providing services and helping Taiwanese companies swiftly settle in Japan.” Kuo did not specify the exact location of the planned company but said it would not be in Kumamoto, the Kyushu prefecture in which Taiwan Semiconductor Manufacturing Company (TSMC, 台積電) has a
RSS