The dollar turned up against major currencies on Friday as US Federal Reserve Chairman Ben Bernanke said he would “act as necessary” to control inflation at an economics conference and as oil retreated again. The British pound dropped to a 25-month low.
The euro fell to US$1.4775 in late New York trading from US$1.4877 late on Thursday.
At the economic symposium in Jackson, Wyoming, Bernanke said the “financial storm” in the US “has not yet subsided and its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment.”
He also said the inflation outlook is uncertain but will probably moderate later this year.
While the Fed can try to contain inflation by raising interest rates — which could also support the buck by making US investments more attractive — growing unemployment and concerns about economic growth may stop it from doing so.
Lower interest rates can undermine a currency as investors transfer their funds to assets with better returns.
“The dollar has taken back some of its losses. We’ve got information that indicates: ‘Look, no matter how bad things are going in the US, things look worse elsewhere,’” said David Watt, senior currency strategist at RBC Capital Markets in Toronto.
The British pound, meanwhile, erased Thursday’s gains, dropping to US$1.8519 from US$1.8751. Earlier in the day, the pound had fallen as far as US$1.8503, its lowest point since July 2006.
On Friday, the British government said economic growth in the UK was flat in the second quarter, the first time the economy didn’t grow for almost 16 years. Economists said contraction in the third quarter is likely, meaning that Britain could be in a recession.
The Bank of England and the European Central Bank early this month left their interest rates unchanged at 5 percent and 4.25, respectively. The Fed cut its rates seven times from September to June. Its next meeting is on Sept. 16 and many economists believe the rate will remain steady.
The dollar also rose to ¥110.03 from ¥108.65 on Thursday.
Tropical Storm Usagi strengthened to a typhoon yesterday morning and remains on track to brush past southeastern Taiwan from tomorrow to Sunday, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, the storm was approximately 950km east-southeast of Oluanpi (鵝鑾鼻), Taiwan proper’s southernmost point, the CWA said. It is expected to enter the Bashi Channel and then turn north, moving into waters southeast of Taiwan, it said. The agency said it could issue a sea warning in the early hours of today and a land warning in the afternoon. As of 2pm yesterday, the storm was moving at
DISCONTENT: The CCP finds positive content about the lives of the Chinese living in Taiwan threatening, as such video could upset people in China, an expert said Chinese spouses of Taiwanese who make videos about their lives in Taiwan have been facing online threats from people in China, a source said yesterday. Some young Chinese spouses of Taiwanese make videos about their lives in Taiwan, often speaking favorably about their living conditions in the nation compared with those in China, the source said. However, the videos have caught the attention of Chinese officials, causing the spouses to come under attack by Beijing’s cyberarmy, they said. “People have been messing with the YouTube channels of these Chinese spouses and have been harassing their family members back in China,”
The Central Weather Administration (CWA) yesterday said there are four weather systems in the western Pacific, with one likely to strengthen into a tropical storm and pose a threat to Taiwan. The nascent tropical storm would be named Usagi and would be the fourth storm in the western Pacific at the moment, along with Typhoon Yinxing and tropical storms Toraji and Manyi, the CWA said. It would be the first time that four tropical cyclones exist simultaneously in November, it added. Records from the meteorology agency showed that three tropical cyclones existed concurrently in January in 1968, 1991 and 1992.
GEOPOLITICAL CONCERNS: Foreign companies such as Nissan, Volkswagen and Konica Minolta have pulled back their operations in China this year Foreign companies pulled more money from China last quarter, a sign that some investors are still pessimistic even as Beijing rolls out stimulus measures aimed at stabilizing growth. China’s direct investment liabilities in its balance of payments dropped US$8.1 billion in the third quarter, data released by the Chinese State Administration of Foreign Exchange showed on Friday. The gauge, which measures foreign direct investment (FDI) in China, was down almost US$13 billion for the first nine months of the year. Foreign investment into China has slumped in the past three years after hitting a record in 2021, a casualty of geopolitical tensions,
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