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
SEMICONDUCTORS: The German laser and plasma generator company will expand its local services as its specialized offerings support Taiwan’s semiconductor industries Trumpf SE + Co KG, a global leader in supplying laser technology and plasma generators used in chip production, is expanding its investments in Taiwan in an effort to deeply integrate into the global semiconductor supply chain in the pursuit of growth. The company, headquartered in Ditzingen, Germany, has invested significantly in a newly inaugurated regional technical center for plasma generators in Taoyuan, its latest expansion in Taiwan after being engaged in various industries for more than 25 years. The center, the first of its kind Trumpf built outside Germany, aims to serve customers from Taiwan, Japan, Southeast Asia and South Korea,
Gasoline and diesel prices at domestic fuel stations are to fall NT$0.2 per liter this week, down for a second consecutive week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) announced yesterday. Effective today, gasoline prices at CPC and Formosa stations are to drop to NT$26.4, NT$27.9 and NT$29.9 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to fall to NT$24.8 per liter at CPC stations and NT$24.6 at Formosa pumps, they said. The price adjustments came even as international crude oil prices rose last week, as traders
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which supplies advanced chips to Nvidia Corp and Apple Inc, yesterday reported NT$1.046 trillion (US$33.1 billion) in revenue for last quarter, driven by constantly strong demand for artificial intelligence (AI) chips, falling in the upper end of its forecast. Based on TSMC’s financial guidance, revenue would expand about 22 percent sequentially to the range from US$32.2 billion to US$33.4 billion during the final quarter of 2024, it told investors in October last year. Last year in total, revenue jumped 31.61 percent to NT$3.81 trillion, compared with NT$2.89 trillion generated in the year before, according to
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
RSS