The US dollar staged a small but significant recovery on Friday, helped by favorable US corporate news and recovering risk appetites.
The euro fell to US$1.5814 around 9pm GMT from US$1.5886 late on Thursday.
The dollar rose to ¥103.66 from ¥102.48 on Thursday.
“The main force behind the latest reappearance of risk appetite was a new 2008 low in equity volatility yesterday on the back of constructive earnings releases and outlooks by CEOs,” analysts at UBS wrote in a client note. “In that respect today’s announcement by a major US bank of a Q1 loss that was near consensus and considerably lower than in Q4 was constructive enough to further boost risk appetite.”
The bank in question was Citigroup Inc, which reported a US$5.1 billion net loss in the first quarter, half the US$10 billion loss it suffered in the fourth quarter of last year.
To some extent the dollar along with the pound also got a boost as the central banks of both countries sought to put some distance between their support for mortgage and credit markets from monetary policy, in turn allowing them to sound more hawkish on inflation.
The Bank of England is finalizing a plan that would see it accepting mortgage-backed assets in exchange for Treasury gilts in order to kick-start interbank lending back to life, a measure adopted earlier by the US Federal Reserve.
The Fed’s program is allowing rate-setters to “de-couple” their monetary policy from their support for financial markets and mortgage lending.
In late New York trading on Friday, the dollar stood at 1.0180 Swiss francs, up from SF1.0055 late on Thursday.
The pound was at US$1.9978, up from US$1.9918.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
COORDINATION, ASSURANCE: Separately, representatives reintroduced a bill that asks the state department to review guidelines on how the US engages with Taiwan US senators on Tuesday introduced the Taiwan travel and tourism coordination act, which they said would bolster bilateral travel and cooperation. The bill, proposed by US senators Marsha Blackburn and Brian Schatz, seeks to establish “robust security screenings for those traveling to the US from Asia, open new markets for American industry, and strengthen the economic partnership between the US and Taiwan,” they said in a statement. “Travel and tourism play a crucial role in a nation’s economic security,” but Taiwan faces “pressure and coercion from the Chinese Communist Party [CCP]” in this sector, the statement said. As Taiwan is a “vital trading
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