The dollar turned up against major currencies on Friday as US Federal Reserve Chairman Ben Bernanke said he would “act as necessary” to control inflation at an economics conference and as oil retreated again. The British pound dropped to a 25-month low.
The euro fell to US$1.4775 in late New York trading from US$1.4877 late on Thursday.
At the economic symposium in Jackson, Wyoming, Bernanke said the “financial storm” in the US “has not yet subsided and its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment.”
He also said the inflation outlook is uncertain but will probably moderate later this year.
While the Fed can try to contain inflation by raising interest rates — which could also support the buck by making US investments more attractive — growing unemployment and concerns about economic growth may stop it from doing so.
Lower interest rates can undermine a currency as investors transfer their funds to assets with better returns.
“The dollar has taken back some of its losses. We’ve got information that indicates: ‘Look, no matter how bad things are going in the US, things look worse elsewhere,’” said David Watt, senior currency strategist at RBC Capital Markets in Toronto.
The British pound, meanwhile, erased Thursday’s gains, dropping to US$1.8519 from US$1.8751. Earlier in the day, the pound had fallen as far as US$1.8503, its lowest point since July 2006.
On Friday, the British government said economic growth in the UK was flat in the second quarter, the first time the economy didn’t grow for almost 16 years. Economists said contraction in the third quarter is likely, meaning that Britain could be in a recession.
The Bank of England and the European Central Bank early this month left their interest rates unchanged at 5 percent and 4.25, respectively. The Fed cut its rates seven times from September to June. Its next meeting is on Sept. 16 and many economists believe the rate will remain steady.
The dollar also rose to ¥110.03 from ¥108.65 on Thursday.
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
RSS