The euro hit a six-an-a-half-month low yesterday, falling for a third day in row as a selloff in Italy’s bond markets due to rising political worries drove investors to dump the single currency.
Italian President Sergio Mattarella on Monday set the nation on a path to early elections, appointing former IMF official Carlo Cottarelli as prime minister with the task of planning for snap polls and passing the next budget.
Financial markets are concerned the elections, which could take place as soon as August, might serve as a quasi-referendum on Italy’s role in the EU and eurozone, and strengthen the nation’s euroskeptic parties even further.
Photo: EPA
The euro yesterday dropped below US$1.16 for the first time in six-and-a-half months, down 0.3 percent on the day.
Against the Swiss franc, it fell by a similar margin to 1.1528 francs.
“The spillover effect on the euro from the Italian bond markets is limited for now, but that can change if the selloff forces investors to dump other peripheral debt,” said Viraj Patel, a currency strategist at ING in London.
On a monthly basis, the euro has fallen more than 4 percent and is set for its biggest monthly drop in more than three years, according to Thomson Reuters data.
Italy’s two-year bond yield was up 54 basis points at 1.42 percent, having earlier touched 1.7 percent — its highest since late 2013.
“There are still a lot of euro long positions that had been built up during the currency’s bull phase until May that need to be unwound, and the euro’s decline looks set to continue,” said Yukio Ishizaki, senior currency strategist at Daiwa Securities in Tokyo.
With a decline in US Treasury yields also weighing, the greenback lost about 0.6 percent to a three-week low of ￥108.730.
The US dollar rose briefly to ￥109.830 on Monday as US-North Korea summit plans appeared back on track, but the relief has been quickly eclipsed by eurozone political concerns.
The US dollar index against a basket of six major currencies was up 0.5 percent on the day at 94.70, hitting a six-and-a-half month high.
The Australian dollar, sensitive to shifts in risk sentiment, was down 0.3 percent at A$0.7525. The New Zealand dollar slipped 0.2 percent to NZ$0.6929.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
MARKET LEADERSHIP: Investors are flocking to Nvidia, drawn by the company’s long-term fundamntals, dominant position in the AI sector, and pricing and margin power Two years after Nvidia Corp made history by becoming the first chipmaker to achieve a US$1 trillion market capitalization, an even more remarkable milestone is within its grasp: becoming the first company to reach US$4 trillion. After the emergence of China’s DeepSeek (深度求索) sent the stock plunging earlier this year and stoked concerns that outlays on artificial intelligence (AI) infrastructure were set to slow, Nvidia shares have rallied back to a record. The company’s biggest customers remain full steam ahead on spending, much of which is flowing to its computing systems. Microsoft Corp, Meta Platforms Inc, Amazon.com Inc and Alphabet Inc are
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
The US overtaking China as Taiwan’s top export destination could boost industrial development and wage growth, given the US is a high-income economy, an economist said yesterday. However, Taiwan still needs to diversify its export markets due to the unpredictability of US President Donald Trump’s administration, said Chiou Jiunn-rong (邱俊榮), an economics professor at National Central University. Taiwan’s exports soared to a record US$51.74 billion last month, driven by strong demand for artificial intelligence (AI) products and continued orders, with information and communication technology (ICT) and audio/video products leading all sectors. The US reclaimed its position as Taiwan’s top export market, accounting for
RSS