The euro declined the most since July versus the US dollar after European Central Bank (ECB) President Mario Draghi said a strong currency could slow the region’s economic recovery, lifting bets the bank may lower interest rates.
The yen declined against the greenback for the first time in 13 weeks as the Bank of Japan (BOJ) governor said he will step down early, accelerating a transition that may aid the prime minister’s plan for monetary easing. The BOJ will meet on Tuesday. The euro fell against all but two of its 16 most-traded peers this week as Italian and Spanish bonds slumped amid political turmoil.
“The euro correction is probably long overdue,” Greg Anderson, New York-based head of G10 currency strategy at Citigroup Inc, said on Friday in a telephone interview. “The market bought into the theme that the ECB is going to be the tightest of the G4 central banks because they won’t do anything while everyone else does quantitative easing. What Draghi did changed the psychology a bit.”
The US Federal Reserve, ECB, BOJ and Bank of England comprise the G4.
The euro declined 2 percent to US$1.3366 this week and touched US$1.3353 on Friday, its weakest level since Jan. 25. The loss was the euro’s biggest drop since the five days ended July 6. The shared currency fell 2.2 percent to ¥123.88. The yen depreciated 0.1 percent to ¥92.88 per US dollar after touching ¥94.06 on Feb. 6, its lowest level since May 5, 2010.
The euro, which touched a 14-month high of US$1.3711 on Feb. 1, has been the best performer this year among 10 developed-market currencies tracked by Bloomberg Correlation-Weighted Indexes, gaining 2 percent. The yen weakened the most, 6.6 percent, and the US dollar increased 0.6 percent.
The British pound rose the most in two years this week versus the euro amid bets the Bank of England will refrain from extending its stimulus program in contrast to its European counterpart.
Sterling appreciated 2.7 percent to £0.8459 per euro this week, its biggest five-day drop since January 2011. The pound gained 0.7 percent to US$1.5796.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday obtained the government’s approval to inject an additional US$7.5 billion into its US subsidiary, the Department of Investment Review said in a statement. The department approved TSMC’s application of investing in TSMC Arizona Corp, which is engaged in the manufacturing, sales, testing and design of IC and other semiconductor devices, it said. The latest capital injection follows a US$5 billion investment for TSMC Arizona approved in June. The chipmaker has broken ground on two advanced fabs in Arizona with aggregated investments approved by the department totaling US$24 billion thus far. According to TSMC, the first Arizona
The lethal hack of Hezbollah’s Asian-branded pagers and walkie-talkies has sparked an intense search for the devices’ path, revealing a murky market for older technologies where buyers might have few assurances about what they are getting. While supply chains and distribution channels for higher-margin and newer products are tightly managed, that is not the case for older electronics from Asia where counterfeiting, surplus inventories and complex contract manufacturing deals can sometimes make it impossible to identify the source of a product, analysts and consultants say. The response from the companies at the center of the booby-trapped gadgets that killed 37
FRIENDLY TAKEOVER: While Qualcomm Inc’s proposal to buy some or all of Intel raises the prospect of other competitors, Broadcom Inc is staying on the sidelines Qualcomm Inc has approached Intel Corp to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever merger and acquisition deals. California-based Qualcomm proposed a friendly takeover for Intel in recent days, said the sources, who asked not to be identified discussing confidential information. The proposal is for all of the chipmaker, although Qualcomm has not ruled out buying some parts of Intel and selling off others. It is uncertain whether the initial approach would lead to an agreement and any deal is likely to come under close antitrust scrutiny
SECURITY CONCERNS: The proposed ban on Chinese autonomous vehicle software and hardware would go into effect with the 2027 and 2030 model years respectively The US Department of Commerce today is expected to propose prohibiting Chinese software and hardware in connected and autonomous vehicles on US roads due to national security concerns, two sources said. US President Joe Biden’s administration has raised concerns about the collection of data by Chinese companies on US drivers and infrastructure as well as the potential foreign manipulation of vehicles connected to the Internet and navigation systems. The proposed regulation would ban the import and sale of vehicles from China with key communications or automated driving system software or hardware, said the two sources, who declined to be identified because the