The euro fell by the most in 11 months against the yen as rising Spanish borrowing costs boosted concern the region’s sovereign-debt crisis in worsening.
The US dollar posted weekly gains against most of its major counterparts, as demand for safety increased. Higher-yielding currencies, led by South Africa’s rand, fell as a report showed US employers added the fewest jobs in five months last month, which fueled concern the US economic recovery was slowing and underscored bets the US Federal Reserve would introduce further stimulus.
The yen rose against all of its major peers ahead of a Bank of Japan meeting on Tuesday.
Photo: Reuters
“The rain has come from Spain,” said Alan Ruskin, global head of G10 foreign-exchange strategy at Deutsche Bank AG in New York. “The austerity policy is so harsh that it could undermine their own capacity to deliver better fiscal numbers. The Spain story is front and center” for the euro.
The 17-nation euro dropped 3.4 percent to ￥106.86 in New York, its biggest weekly loss since May last year. The shared currency fell 1.9 percent to US$1.3096, reaching US$1.3035 on Thursday, its lowest level since March 15. The US dollar weakened 1.5 percent to ￥81.64.
The rand and Sweden’s krona declined the most against the US dollar among the 16 major currencies tracked by Bloomberg. South Africa’s currency slumped 2.7 percent to 7.8834 per US dollar, while the krona lost 2.1 percent to 6.7522.
The Swiss franc strengthened to SF1.19995 per euro on Thursday, breaking the Swiss National Bank-imposed ceiling of SF1.20 per euro. It appreciated 0.3 percent this week, rising for a third week, to SF1.2010 per euro. It lost 1.6 percent to SF0.9173 per US dollar.
The Swiss central bank set a limit of 1.20 francs per euro on Sept. 6 last year to protect exports after investors turned to the Swiss franc as a haven from Europe’s sovereign-debt crisis. The bank won’t allow the franc to rise above the ceiling and is ready to buy foreign currencies in unlimited quantities, spokesman Walter Meier said by telephone on Thursday.
The euro slid 1.1 percent this week, the second-worst performer after the krona among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The yen has gained 2.6 percent and the US dollar has appreciated 0.9 percent.
The Dollar Index, which Intercontinental Exchange Inc uses to track the greenback against the currencies of six US major trading partners, gained 1.1 percent to 79.839, halting three consecutive weeks of losses.
The pound gained for a second week versus the euro, rising to ￡0.8238 on Thursday, from ￡0.8327 on March 30. The British currency dropped 0.8 percent to US$1.5838.
EARLY TALKS: Measures under consideration include convincing allies to match US curbs, further restricting exports of AI chips or GPUs, and blocking Chinese investments US President Donald Trump’s administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry, an early indication the new US president plans to expand efforts that began under former US president Joe Biden to limit Beijing’s technological prowess. Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd and ASML Holding NV engineers from maintaining semiconductor gear in China, people familiar with the matter said. The aim, which was also a priority for Biden, is to see key allies match China curbs the US
The popular Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) arbitrage trade might soon see a change in dynamics that could affect the trading of the US listing versus the local one. And for anyone who wants to monetize the elevated premium, Goldman Sachs Group Inc highlights potential trades. A note from the bank’s sales desk published on Friday said that demand for TSMC’s Taipei-traded stock could rise as Taiwan’s regulator is considering an amendment to local exchange-traded funds’ (ETFs) ownership. The changes, which could come in the first half of this year, could push up the current 30 percent single-stock weight limit
NOT TO WORRY: Some people are concerned funds might continue moving out of the country, but the central bank said financial account outflows are not unusual in Taiwan Taiwan’s outbound investments hit a new high last year due to investments made by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and other major manufacturers to boost global expansion, the central bank said on Thursday. The net increase in outbound investments last year reached a record US$21.05 billion, while the net increase in outbound investments by Taiwanese residents reached a record US$31.98 billion, central bank data showed. Chen Fei-wen (陳斐紋), deputy director of the central bank’s Department of Economic Research, said the increase was largely due to TSMC’s efforts to expand production in the US and Japan. Investments by Vanguard International
‘SACRED MOUNTAIN’: The chipmaker can form joint ventures abroad, except in China, but like other firms, it needs government approval for large investments Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) needs government permission for any overseas joint ventures (JVs), but there are no restrictions on making the most advanced chips overseas other than for China, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. US media have said that TSMC, the world’s largest contract chipmaker and a major supplier to companies such as Apple Inc and Nvidia Corp, has been in talks for a stake in Intel Corp. Neither company has confirmed the talks, but US President Donald Trump has accused Taiwan of taking away the US’ semiconductor business and said he wants the industry back
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