The yuan climbed past the psychological milestone of 7 yuan per US dollar for the first time since September last year, on bets China’s central bank would allow gradual currency appreciation to boost market confidence.
The offshore yuan yesterday gained as much as 0.2 percent to 6.9964 yuan per US dollar. The move came after the People’s Bank of China strengthened its daily reference rate to the strongest level since September last year.
The central bank on Wednesday promised to ensure adequate money supply to support financing, economic growth and inflation targets. Earlier in the week, it had opted to keep its key short-term lending rates unchanged.
Photo: Reuters
The yuan is headed for its best year in half a decade against the US dollar, thanks to a slump in the US currency, inflows chasing China’s stock-market rebound and easing geopolitical tensions.
Beijing has been guiding the yuan stronger at a carefully orchestrated pace with its fixing in the past few months as it seeks to allow currency appreciation without triggering foreign-exchange volatility.
“The yuan has been bolstered by weakness in the dollar and seasonal foreign-exchange conversion by exporters,” Golden Credit Rating International Co (東方金誠國際信評) chief macro analyst Wang Qing (王青) said. “A sustained yuan gain will be helpful in increasing the appeal of China’s capital markets to foreign investors.”
In onshore trading, the Chinese currency yesterday gained 0.1 percent to 7.0067 yuan per US dollar.
Flows were tilted toward US dollar selling, with major Chinese banks seen buying the greenback heavily at about 7.006, according to traders asking not to be identified as they were not authorized to speak publicly.
Offshore liquidity was thin due to holiday effects, the traders said.
Hong Kong markets were shut yesterday and would be closed today for the Christmas holidays.
Despite its rally versus the US dollar, many analysts say the yuan is still too cheap on a trade-weighted basis and considering China’s entrenched deflation.
Goldman Sachs Group Inc said the currency was 25 percent undervalued relative to economic fundamentals.
The yuan would likely stay strong in the range of 6.95 to 7 yuan per US dollar in the first half of next year, Australia & New Zealand Banking Group senior strategist Xing Zhaopeng (邢兆鵬) said.
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
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,
POWERING UP: PSUs for AI servers made up about 50% of Delta’s total server PSU revenue during the first three quarters of last year, the company said Power supply and electronic components maker Delta Electronics Inc (台達電) reported record-high revenue of NT$161.61 billion (US$5.11 billion) for last quarter and said it remains positive about this quarter. Last quarter’s figure was up 7.6 percent from the previous quarter and 41.51 percent higher than a year earlier, and largely in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$160 billion. Delta’s annual revenue last year rose 31.76 percent year-on-year to NT$554.89 billion, also a record high for the company. Its strong performance reflected continued demand for high-performance power solutions and advanced liquid-cooling products used in artificial intelligence (AI) data centers,
RSS