The US dollar posted its biggest weekly loss since November against the currencies of major US trading partners as an unexpected drop in jobs boosted speculation that the Federal Reserve may extend stimulus measures.
Sterling was the only major currency to fall against the dollar this week as British Prime Minister Gordon Brown clashed with the Conservative opposition on the UK’s budget deficit. The greenback slid from a four-month high against the yen on the prospects for the world’s largest economy. A report next week is forecast to show US retail sales grew at a slower pace.
The trade-weighted Dollar Index, which the ICE futures exchange uses to track the greenback against currencies including the euro, yen and pound, decreased 0.5 percent to 77.471 on Friday, from 77.860 on Jan. 1. It touched 78.449 on Dec. 22, the highest level since September.
The US dollar slid 0.4 percent to ¥92.66 this week, the greenback’s first five-day drop since Dec. 11. The dollar fell 0.6 to US$1.4409 per euro, from US$1.4324. The euro gained 0.2 percent to ¥133.46, from ¥133.20.
The pound dropped for a seventh week in eight against the US dollar.
Sterling also depreciated versus the euro after a cross-party committee of lawmakers that scrutinizes Treasury policy published a report saying budget plans announced last month lack enough clarity to ensure credibility with markets. Chancellor of the Exchequer Alistair Darling said last month he planned to boost borrowing to revive the economy. The Bank of England this week kept its key interest rate at 0.5 percent and its asset-purchase program target at £200 billion (US$318 billion).
“The fiscal position in the UK is leading to a negative sentiment for the pound,” said Ian Stannard, a senior currency strategist at BNP Paribas SA in London. “And foreign investors are never happy to invest where there is political uncertainty.”
The pound fell 1 percent to US$1.5986 as of 4:45pm in London on Friday. It weakened 1.3 percent to £0.8976 per euro.
ASIAN CURRENCIES
Asian currencies rose this week, led by the South Korean won and Indian rupee, as the outlook for economic growth and interest-rate increases this year attracted overseas funds to the region’s assets.
The Bloomberg-JPMorgan Asia Dollar Index started the new year with its best weekly performance since May, as reports in Indonesia and Taiwan showed exports are rebounding.
The won climbed 2.9 percent to 1,130.75 per US dollar at the 3pm close in Seoul from a week ago, the biggest gain in eight months, according to data compiled by Bloomberg.
The rupee rose 1.8 percent to 45.7652 and the rupiah appreciated 1.9 percent to 9,215.
The baht traded near a three-week high after Finance Minister Korn Chatikavanij said on Thursday the government would spend as much as 5 percent of GDP this year to boost an economic recovery. The baht rose 0.6 percent this week to 33.16 per US dollar in Bangkok.
The New Taiwan dollar rose 0.5 percent to NT$31.88 this week.
Elsewhere, the Philippine peso climbed 0.9 percent to 45.81 and Malaysia’s ringgit climbed 0.8 percent to 3.3775 this week.
The Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
PRECISION STRIKES: The most significant reason to deploy HIMARS to outlying islands is to establish a ‘dead zone’ that the PLA would not dare enter, a source said A High Mobility Artillery Rocket System (HIMARS) would be deployed to Penghu County and Dongyin Island (東引) in Lienchiang County (Matsu) to force the Chinese military to retreat at least 100km from the coastline, a military source said yesterday. Taiwan has been procuring HIMARS and Army Tactical Missile Systems (ATACMS) from the US in batches. Once all batches have been delivered, Taiwan would possess 111 HIMARS units and 504 ATACMS, which have a range of 300km. Considering that “offense is the best defense,” the military plans to forward-deploy the systems to outlying islands such as Penghu and Dongyin so that
WHAT WAS ALL THAT FOR? Jaw Shaw-kong said that Cheng Li-wen had pushed for more drastic cuts and attacked him, just for the outcome to be nearly identical to his bill The legislature yesterday passed a supplementary budget bill to fund the purchase of separate packages of US military equipment, with the combined amount of spending capped at NT$780 billion (US$24.8 billion). The Chinese Nationalist Party (KMT) and Taiwan People’s Party (TPP) used their legislative majority to pass the bill, which runs until 2033 and has two main funding provisions. One was for NT$300 billion of arms sales already approved by the US for Taiwan on Dec. 17 last year, the other was for NT$480 billion for another arms package expected to be announced by Washington. The bill, which fell short of the NT$1.25
‘CLEAR MESSAGE’: The bill would set up an interagency ‘tiger team’ to review sanctions tools and other economic options to help deter any Chinese aggression toward Taiwan US Representative Young Kim has introduced a bill to deter Chinese aggression against Taiwan, calling for an interagency “tiger team” to preplan coordinated sanctions and economic measures in response to possible Chinese military or political action against Taiwan. “[Chinese President] Xi Jinping [習近平] has directed the People’s Liberation Army to be ready to invade Taiwan by 2027. China has a plan. America should have one too,” Kim said in a news release on Thursday last week. She introduced the “Deter PRC [People’s Republic of China] aggression against Taiwan act” to “ensure the US has a coordinated sanctions strategy ready should
RSS