Indonesia’s rupiah led losses in Asian currencies this week, as signs of improvement in the US economy boosted bets the Federal Reserve would trim stimulus, a policy that has driven demand for emerging-market assets.
The rupiah fell for a third week as overseas investors pulled a combined US$1.6 billion from stocks in Indonesia, Taiwan, the Philippines, South Korea and Thailand, exchange data show.
A deadly typhoon that hit the Philippines on Nov. 8 spurred the biggest five-day drop in the peso since August, while political unrest in Thailand weighed on the baht. Reports from the US this month showed economic growth and employment beat economists’ estimates.
Photo: Reuters
“The US economy seems to be recovering,” said Tsutomu Soma, manager of the fixed-income business unit at Rakuten Securities Inc in Tokyo. “On the other hand, there was the typhoon in the Philippines and political concern in Thailand, which weighed on sentiment. All in all, the momentum is for a stronger dollar and weaker regional currencies.”
Indonesia’s currency dropped 1.8 percent this week to 11,620 per US dollar and reached 11,675 on Wednesday, the lowest level since Sept. 30, according to prices from local banks compiled by Bloomberg. India’s rupee fell 1 percent to 63.12 per US dollar, the peso weakened 1.1 percent to 43.65 and Malaysia’s ringgit slipped 0.7 percent to 3.2023.
INTERVENTION
The New Taiwan dollar also dropped 0.4 percent this week to NT$29.62, aided in part by central bank intervention, dealers said.
US Federal Reserve Vice Chair Janet Yellen, the nominee to replace Fed Chairman Ben Bernanke, said this week that the US economy still needs the stimulus to ensure a sustainable recovery.
The Fed will delay until March any cut to its US$85 billion of monthly bond purchases, according to the median estimate of 32 economists in a Bloomberg survey conducted on Nov. 8.
US manufacturing unexpectedly picked up last month, while US employers added 204,000 to payrolls, a figure that topped the most optimistic forecast in a Bloomberg survey of economists and followed a 163,000 increase in September, reports showed. The Bloomberg US Dollar Index dropped 0.5 percent this week, its first five-day loss since Oct. 25.
“Asian currencies are reacting to the payrolls data,” said Sean Yokota, head of Asia strategy at Skandinaviska Enskilda Banken AB in Singapore.
Elsewhere in Asia, the Thai baht lost 0.4 percent this week to 31.590 against the greenback and South Korea’s won rose 0.1 percent to 1,063.53, while China’s yuan was little changed at 6.0925. Vietnam’s dong was steady at 21,100.
YEN BREAKS 100
Japan’s currency tumbled for a third week as it broke the ￥100 per US dollar mark for the first time since Sept. 11. The pound rallied to a four-year high versus the yen after the Bank of England signaled an interest-rate increase in the third quarter of 2015, rather than the second quarter of 2016. The greenback fell against the euro, wiping out last week’s gain that followed better-than-forecast US employment data and an unexpected European Central Bank interest rate cut.
“You’re still early in this dollar-rollover period,” Jonathan Lewis, chief investment officer at Samson Capital Advisors LLC and manager of the Samson Strong Nations Currency Fund, said in a telephone interview from New York.
“It’s fair to say that if the market took Yellen’s perspective seriously, easier and aggressive for as long as it takes to get the job done, that the dollar would be rolling over more materially,” Lewis said.
The Bloomberg US Dollar Index, which monitors the greenback against 10 major counterparts, fell 0.5 percent to 1,016.88 this week in New York. It touched 1,015.83, the lowest since Nov. 7, and 1,025.01, the highest since Sept. 13.
The yen fell 1.2 percent to ￥100.19 per dollar after depreciating to ￥100.44, the weakest level since Sept. 11. Japan’s currency slid 0.5 percent to ￥135.21 per euro. The US dollar fell 1 percent to US$1.3496 per euro.
The pound climbed 1.8 percent this week to ￥161.49 and touched ￥161.65, the highest since August 2009. Sterling added 0.6 percent to US$1.6118 after reaching US$1.6135, the highest level since Oct. 29.
Additional reporting by staff writer
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
TECH WAR CONTINUES: The suspension of TSMC AI chips and GPUs would be a heavy blow to China’s chip designers and would affect its competitive edge Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, is reportedly to halt supply of artificial intelligence (AI) chips and graphics processing units (GPUs) made on 7-nanometer or more advanced process technologies from next week in order to comply with US Department of Commerce rules. TSMC has sent e-mails to its Chinese AI customers, informing them about the suspension starting on Monday, Chinese online news outlet Ijiwei.com (愛集微) reported yesterday. The US Department of Commerce has not formally unveiled further semiconductor measures against China yet. “TSMC does not comment on market rumors. TSMC is a law-abiding company and we are
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
RSS