The New Taiwan dollar fell to its weakest level since April last year, erasing gains from last year’s historic rally as US dollar strength and record dividend payouts weighed on sentiment.
The local currency dropped as much as 0.6 percent before paring losses to close at NT$32.178 per US dollar in Taipei yesterday. The move wiped out the sharp gains from May last year, when the currency soared by the most since the 1980s on easing trade tensions and upbeat tech earnings.
The NT dollar now faces a key test as Taiwan enters its peak dividend season this month, with heavy foreign ownership in the semiconductor sector likely amplifying US dollar conversions. Domestic firms are set to pay out more than NT$2.5 trillion (US$77.69 billion) in cash dividends this year, data from the Taiwan Stock Exchange showed.
Photo: CNA
That is the largest amount in Bloomberg-compiled data going back to 1990.
The risk of outflows is heightened by a less supportive global environment. The greenback’s strength on expectations that US interest rates would stay elevated for longer, combined with a rebound in oil prices due to renewed Middle East tensions, are adding to headwinds for Taiwan’s currency.
“TWD weakness today is likely due to dividend payment repatriation,” Australia and New Zealand Banking Group Ltd head of Asia research Khoon Goh (吳昆) said. “Taiwan Semiconductor Manufacturing Co (台積電) paid out its quarterly dividend today, and given the large foreign holdings, those flows are weighing on TWD.”
He sees the currency facing near-term pressure and falling to NT$32.5 per US dollar on further dividend payments later this month.
The NT dollar yesterday weakened sharply as foreign investors remitted large sums overseas, several traders said.
While exporter and state bank greenback sales briefly pared morning currency losses, massive outflow volumes ultimately drove the local currency lower, traders said.
Earlier this week, the central bank was said to have asked local banks to execute some large greenback sell orders on the day they are received instead of delaying or staggering them, people familiar with the matter said.
The intervention came as the NT dollar encountered seasonal weakness. The central bank regularly monitors and guides foreign-exchange transactions, including those from exporters and life insurance companies. It permits or encourages them to execute large-scale US dollar sell orders when the NT dollar depreciates while allowing some US dollar buy orders when the local currency strengthens.
For Fiona Lim, senior foreign exchange strategist at Malayan Banking Bhd, developments in the Middle East are likely to steer the currency.
“We should continue to watch the US-Iran headlines and US data for an indication on whether the pressure on the TWD can be sustained. An acceleration in its decline could invite larger interventions,” she said.
Their metallic frames covered in supple, lifelike skin, a posse of new Chinese robots meant for companionship can offer users artificial intelligence (AI)-generated conversation or a hand to hold, complete with manicured nails. The company UBTech says its U1 robot — equipped with eye cameras, chest sensors and listening microphones — is the world’s first full-sized, ultra-realistic humanoid designed for mass production. Touted as an antidote to loneliness, the robots are priced at 119,800 yuan (US$17,600) for the most basic type and 990,000 yuan (US$145,700) for an “ultra” version with more advanced features. “Our bionic robots can accompany you for a lifetime,” Michael
REGIONAL GAMBIT: Powertech’s subsidiary plans to acquire ON Semiconductor’s local operation for US$45m, adding Southeast Asian testing and packaging capacity Powertech Technology Inc (力成科技), the world’s largest memorychip testing and packaging service provider, yesterday said it plans to acquire the entire Philippine unit of ON Semiconductor Japan Holdings Ltd for US$45 million as part of efforts to navigate global supply chain realignment amid escalating geopolitical risks. The transaction will be conducted by its subsidiary Greatek Electronics Inc (超豐), a provider of logic chip packaging and testing services. Powertech holds a 43 percent stake in Greatek. “This move is a core component of the company’s mid-to-long-term growth strategy and directly aligns with major customers’ “Taiwan Plus One” approach to diversify their sourcing in
A growing nationwide shortage of high-skilled workers threatens to delay construction of billions of dollars in new semiconductor plants across the US and constrain future chip production unless the industry pools resources and the government keeps up funding, a new report said. The deficit is expected to be most acute in states such as Texas, California, Arizona, New York and Ohio, where many of the new facilities are being planned, according to new analysis including a survey of employers from McKinsey & Co, the chip industry group SEMI and the National Science Foundation. Altogether, the skilled labor deficit is projected to
Chinese start-up DeepSeek (深度求索) is developing its own artificial intelligence (AI) chip, according to three people familiar with the matter, a push that could reduce its reliance on Nvidia Corp and Huawei Technologies Co (華為) chips, which it has depended on to train and run its globally popular models. The chip is designed for inference — the stage of AI computing in which a trained model generates responses for users — rather than for training new models, the sources said. If successful, DeepSeek’s expansion into semiconductor development would mark a major strategic shift for a company widely hailed in China as the
RSS