Asian currencies completed a weekly loss, led by the Singapore dollar and Malaysia’s ringgit, as the US dollar climbed amid speculation the US Federal Reserve is on track to raise interest rates this year.
Fed officials remain open to tightening this year, though a June liftoff in rates is unlikely, according to the minutes of their April meeting released on Wednesday.
A preliminary gauge of manufacturing in China, Asia’s biggest economy, missed estimates this month even after borrowing costs were cut for the third time since November.
The Bloomberg-JPMorgan Asia Dollar Index fell 0.2 percent from May 15 at 4:40pm in Hong Kong. The ringgit weakened 0.6 percent, Singapore’s dollar lost 0.7 percent, Indonesia’s rupiah dropped 0.5 percent, while South Korea’s won declined 0.4 percent.
A gauge of the US dollar jumped 1.6 percent, snapping a five-week decline.
Bucking the trend was the New Taiwan dollar, which rose 0.4 percent on Friday and 0.2 percent from the previous week.
“The [US] dollar recovered as an increase in Fed rates may be likely in September,” said Leong Sook Mei, the Singapore-based Southeast Asia head of global markets research at Bank of Tokyo- Mitsubishi UFJ Ltd.
Fed policymakers expect US growth to pick up after stalling in the first quarter, the minutes showed. The average number of Americans filing for unemployment benefits over the past four weeks dropped to a 15-year low, a sign the labor market continues to strengthen.
China’s preliminary purchasing managers’ index (PMI) from HSBC Holdings PLC and Markit Economics was at 49.1 for this month, missing the median estimate of 49.3 in a Bloomberg survey. Numbers below 50 indicate contraction. Manufacturing output slipped to a 13-month low, the PMI report showed on Thursday, while employment continued to shrink.
“Chinese data was very disappointing,” said Andy Ji, a strategist at Commonwealth Bank of Australia in Singapore. “The market was expecting some kind of stabilization because of the interest-rate and reserve-ratio cuts.”
The ringgit fell as Brent crude prices retreated 0.8 percent this week, weighing on the outlook for Malaysia, the only major Asian oil-exporting nation.
Elsewhere in Asia, the Philippine peso declined 0.1 percent this week, while India’s rupee was little changed. Thailand’s baht climbed 0.4 percent and the Chinese yuan rose 0.1 percent.
Restaurant chain Din Tai Fung (鼎泰豐) today announced it is to close 14 stores in northern China, completely exiting the market by the end of October. Beijing Hengtaifeng Catering Co (北京恆泰豐餐飲), which operates Din Tai Fung restaurants in northern China, said its 20-year operating license expires this year. As the board was unable to reach a consensus on continuing operations, its 14 restaurants in the region are to close by Oct. 31, it said. The company apologized for the inconvenience and disappointment the news would cause among its customers, and said it would provide compensation for its workers. “We continue to be optimistic about
EXPANDING: The European Commission has contributed 5 billion euros in state aid to TSMC’s 12-inch wafer fab in Dresden, Germany, which broke ground on Tuesday Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Saturday said that it has received a total of NT$62.5 billion (US$1.95 billion) in subsidies from China and Japan since 2022. In the first half of this year, TSMC received NT$7.96 billion in subsidies from China and Japan after receiving about NT$47.55 billion last year and obtaining NT$7.05 billion in 2022, financial data compiled by the world’s largest contract chipmaker showed. The company, which makes about 90 percent of the world’s high-end semiconductors, said the subsidies were used to finance its investments in Kumamoto, Japan, and Nanjing, China. TSMC owns a 12-inch wafer fab in
STRATEGIC SHIFT: Diversifying away from the volatile flat-panel industry, AUO aims to boost sales contribution from non-panel business to half of total revenue by 2027 AUO Corp (友達) yesterday said it has agreed to sell its idled manufacturing facility and land in Tainan to Micron Technology Inc for NT$7.4 billion (US$231.8 million) as the company shifts strategy to reduce the impact from the boom-and-bust flat-panel display industry. The company expects to book NT$4.17 billion in disposal gains from the sale, it said in a Taiwan Stock Exchange filing. The Tainan factory produced color filters used in monitors, notebook computers and flat-panel TVs before being shut down last year, as AUO sought to optimize its asset utilization. The company has been striving to diversify and broaden its business
Micron Technology Inc has reportedly set its sights on two facilities owned by flat-panel maker AUO Corp (友達) after Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) recently clinched a deal to buy a facility and equipment from Innolux Corp (群創), another major flat-panel maker. Micron, the world’s third-largest memorychip maker, is expected to purchase two AUO plants in Tainan to expand its advanced chip packaging and testing services and high-bandwidth memory production, local media reports said. The two plants were shut down in August last year and AUO is seeking to dispose of the facilities, the reports said. They are expected to cost Micron