Asian currencies rallied to the highest in seven months as ebbing US recession concerns, bets on US Federal Reserve rate cuts next month and an improving domestic backdrop lifted sentiment in the region.
The Bloomberg Asia Dollar Index gained as much as 0.6 percent yesterday to the highest since January.
The South Korean won and the Malaysian ringgit led the regional advance on upbeat growth prospects and the Thai baht rose on easing political tensions.
Photo: Reuters
“It feels like a Goldilocks scenario, where US recession fears fade while growth momentum in the region remains moderate,” Oversea-Chinese Banking Corp foreign exchange strategist Christopher Wong (黃經隆) said in Singapore. “There is room for Asia ex-Japan currencies to recover against a backdrop of developed-market central banks largely on an easing bias.”
The ringgit rose as much as 1.5 percent to 4.3678 per US dollar, the strongest since February last year. On Friday, Malaysia reported a stronger-than-expected increase in second-quarter GDP from the previous year, while global funds poured the most cash into its stock market since June.
The baht extended gains to 34.409 per US dollar, the highest since January, after Paetongtarn Shinawatra on Friday won enough votes in parliament to become the next Thai prime minister.
Goldman Sachs Group Inc economists on the weekend lowered the probability of a US recession in the next year to 20 percent from 25 percent, citing last week’s better-than-expected US retail sales and jobless claims data. They also said they were “more confident” the Fed would cut interest rates by 25 basis points at its policy meeting next month.
Easing concern about a recession in the world’s biggest economy is a positive for Asia’s export-oriented nations. The won rallied 1.52 percent to 1,331.35, the highest since March. The Philippine peso rallied 1 percent to 56.66 per US dollar, its biggest gain since November last year, while the New Taiwan dollar rose 0.81 percent to 32.03 per US dollar, the highest since April.
The yen climbed as much as 1.7 percent versus the greenback to ￥145.19, before trimming the advance to about 1.1 percent as of 5:17pm in Tokyo as traders waited to see if Bank of Japan Governor Kazuo Ueda would provide hints on the central bank’s rate-hike path in his appearance in front of the parliament on Friday.
Regional equities also climbed yesterday, with the benchmark MSCI Asia Pacific Index rising almost 1 percent to head for its highest close in a month.
“The market is envisaging a brighter picture for Asian economies in the coming quarters,” Invesco Asset Management Japan global market strategist Tomo Kinoshita said. He expects investors to allocate more funds to Asian equities, especially to those in India, Indonesia and Malaysia.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
The prices of gasoline and diesel at domestic fuel stations are to rise NT$0.1 and NT$0.4 per liter this week respectively, after international crude oil prices rose last 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 rise to NT$27.3, NT$28.8 and NT$30.8 per liter for 92, 95 and 98-octane unleaded gasoline respectively, the companies said in separate statements. The price of premium diesel is to rise to NT$26.2 per liter at CPC stations and NT$26 at Formosa pumps, they said. The announcements came after international crude oil prices
SETBACK: Apple’s India iPhone push has been disrupted after Foxconn recalled hundreds of Chinese engineers, amid Beijing’s attempts to curb tech transfers Apple Inc assembly partner Hon Hai Precision Industry Co (鴻海精密), also known internationally as Foxconn Technology Group (富士康科技集團), has recalled about 300 Chinese engineers from a factory in India, the latest setback for the iPhone maker’s push to rapidly expand in the country. The extraction of Chinese workers from the factory of Yuzhan Technology (India) Private Ltd, a Hon Hai component unit, in southern Tamil Nadu state, is the second such move in a few months. The company has started flying in Taiwanese engineers to replace staff leaving, people familiar with the matter said, asking not to be named, as the
RSS