The New Taiwan dollar had the biggest weekly gain against the greenback in eight months on speculation governments around the world will provide further support measures to stem the deepening global economic slump.
The NT dollar gained 1.2 percent this week after the IMF said it has sufficient money available to meet current demand for loans from member nations. US Federal Reserve Chairman Ben Bernanke signaled he’s ready to cut the benchmark interest rate to the lowest level on record, after a half-point reduction to 1 percent.
“There were a number of factors which contributed to the regional currency strength, including the Taiwan dollar,” said Maya Pinto, an economist at IDEAglobal in Singapore. “A combination of things helped in curbing risk aversion. We think volatility and aversion will still be around and we expect to see currency weakness re-emerge”
Taiwan’s currency weakened 0.6 percent to NT$33 against the US dollar as of the 4pm close on Friday, paring the weekly advance, Taipei Forex Inc said. The weekly gain is the steepest since the week ended March 1.
Taiwan’s 10-year government bonds were little changed. The yield on the benchmark 2.125 percent bond maturing September 2018 climbed 0.3 basis point for the week to 1.977 percent, according to the GRETAI Securities Market, Taiwan’s biggest exchange for bonds. Its price fell 0.0307, or NT$30.7 per NT$100,000 face amount, to 101.3109. A basis point is 0.01 percentage point.
The central bank reduced the discount rate on 10-day loans to banks to 3 percent from 3.25 percent effective immediately, bank Governor Perng Fai-nan (彭淮南) said in a press conference in Taipei on Thursday.
The MSCI Asia-Pacific Index of regional stocks dropped as much as 2.5 percent on Friday, snapping a three-day rally, after the US reported the largest drop in GDP since 2001. Eight of the most active Asian currencies outside of Japan fell.
Indonesia’s rupiah completed its worst month since 1998 as overseas investors sold more Indonesian shares than they bought.
The rupiah fell 2.5 percent on Friday to 10,975 per dollar in Jakarta, Bloomberg data show. The currency slumped 13 percent last month.
Non-deliverable forwards contracts show traders are betting the rupiah will weaken 7 percent to 11,800 in a month, compared with 11,475 on Thursday.
The yen rose against the euro on Friday as signs of a global recession prompted investors to sell higher-yielding assets funded by low-cost loans in Japan.
Japan’s currency also advanced against the Australian and New Zealand dollars as commodities including gold and copper fell.
“Investors had positions using the dollar or yen to invest in the euro or emerging-market currencies,” said Masataka Horii, one of four investors for the US$47.9 billion Kokusai Global Sovereign Open fund in Tokyo, the biggest bond fund in Asia. “Now people are rushing to close that position.”
The yen climbed to ¥123.9 per euro in Tokyo on Friday from ¥127.31 on Thursday in New York. Against the dollar, it was at ¥97.01, from ¥98.61.
South Korea’s currency dropped for the first time in three days after manufacturers’ confidence tumbled to a record low and factory output fell for a third month, adding to concern the economy may sink into its first recession since needing an IMF bailout in 1997.
The won weakened 3.2 percent to 1,291 per dollar, Seoul Money Brokerage Services Ltd said.
Malaysia’s ringgit traded at 3.5453 per US dollar on Friday in Kuala Lumpur, according to data compiled by Bloomberg. The currency weakened 3.1 percent last month.
Elsewhere, the Philippine peso weakened 0.5 percent to 48.945, Vietnam’s dong was little changed at 16,830, Singapore’s dollar lost 1.5 percent to S$1.4845 and India’s rupee strengthened 0.6 percent to 49.435.
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,
‘SOMETHING SPECIAL’: Donald Trump vowed to reward his supporters, while President William Lai said he was confident the Taiwan-US partnership would continue Donald Trump was elected the 47th president of the US early yesterday morning, an extraordinary comeback for a former president who was convicted of felony charges and survived two assassination attempts. With a win in Wisconsin, Trump cleared the 270 electoral votes needed to clinch the presidency. As of press time last night, The Associated Press had Trump on 277 electoral college votes to 224 for US Vice President Kamala Harris, the Democratic Party’s nominee, with Alaska, Arizona, Maine, Michigan and Nevada yet to finalize results. He had 71,289,216 votes nationwide, or 51 percent, while Harris had 66,360,324 (47.5 percent). “We’ve been through so
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