The dollar advanced against the euro as traders said the decline after the US Federal Reserve lowered the target lending rate to near zero this week was too fast to be sustained.
The euro also weakened after the European Commission said the region may suffer a “substantial” effect from the financial crisis next year.
The yen traded near a 13-year high against the dollar, even after the Bank of Japan lowered its benchmark interest rate to 0.1 percent.
“This was the most concentrated, rapid rally in the euro since its creation,” said Robert Sinche, head of global currency strategy at Bank of America Corp in New York. “The market got a little ahead of itself in the short run. We are getting a healthy correction now.”
The dollar climbed 2.6 percent to US$1.3874 versus the euro at 12:01pm in New York, from US$1.4240 on Thursday, when it slumped to a 12-week low of US$1.4719.
The euro fell 2.5 percent to ¥124.28 from ¥127.44. The dollar traded at ¥89.48, compared with 89.43. It dropped to ¥87.14 two days ago, the lowest level since 1995.
The US currency declined 2.9 percent against the euro on Wednesday, the biggest drop since the 15-nation currency’s 1999 debut.
The nine-day relative strength index of the dollar versus the euro, a comparison of the magnitude of gains and losses, was at 21.44 yesterday, below the level of 30 that signals a change in direction may be imminent.
“This is not a fundamentally driven move in the euro,” said Lutz Karpowitz, a Frankfurt-based currency strategist at Commerzbank AG. “We have very low liquidity right now, and volatility is very high.”
Asian currencies gained this week, led by South Korea’s won and Malaysia’s ringgit, as a rally in regional stocks helped draw funds. The NT dollar jumped the most in a decade.
Eight of the 10 most-active Asian currencies outside Japan rose on speculation that US interest rates as low as zero are fueling demand for higher-yielding assets. The won, Asia’s worst performer this year, strengthened 14 percent this month. Hong Kong’s dollar was unchanged at the upper end of its fixed exchange-rate band.
“The dominant swing in emerging Asia currencies has been the shift away from the dollar,” said David Cohen, director of Asian forecasting at Action Economics in Singapore and a former Fed official.
The won strengthened 6.4 percent this week to 1,290 per dollar.
Malaysia’s ringgit had its best week since a peg to the dollar ended more than three years ago.
The ringgit rose 3.3 percent this week to 3.4687 per dollar and touched an 11-week high of 3.4390 in Kuala Lumpur yesterday.
The Philippine peso, which had its best week since July, weakened yesterday after the central bank cut its key interest rate on Dec. 18 by more than economists forecast.
Singapore’s dollar gained 2.7 percent this week to S$1.4537 against the US currency. The yuan slipped 0.1 percent to 6.8465.
The NT dollar climbed 2.4 percent this week to NT$32.53 per dollar, its biggest gain since October 1998, as overseas investors bought more local stocks than they sold.
The central bank intervened on Thursday to check the currency’s advance, the China Times said yesterday, citing traders.
The Taipei MRT is open all night tonight following New Year’s Eve festivities, and is offering free rides from nearby Green Line stations. Taipei’s 2025 New Year’s Eve celebrations kick off at Taipei City Hall Square tonight, with performances from the boy band Energy, the South Korean girl group Apink, and singers Gigi Leung (梁詠琪) and Faith Yang (楊乃文). Taipei 101’s annual New Year’s firework display follows at midnight, themed around Taiwan’s Premier12 baseball championship. Estimates say there will be about 200,000 people in attendance, which is more than usual as this year’s celebrations overlap with A-mei’s (張惠妹) concert at Taipei Dome. There are
NEW YEAR’S ADDRESS: ‘No matter what threats and challenges Taiwan faces, democracy is the only path,’ William Lai said, urging progress ‘without looking back’ President William Lai (賴清德) yesterday urged parties across the political divide to democratically resolve conflicts that have plagued domestic politics within Taiwan’s constitutional system. In his first New Year’s Day address since becoming president on May 20 last year, Lai touched on several issues, including economic and security challenges, but a key emphasis was on the partisan wrangling that has characterized his first seven months in office. Taiwan has transformed from authoritarianism into today’s democracy and that democracy is the future, Lai said. “No matter what threats and challenges Taiwan faces, democracy is the only path for Taiwan,” he said. “The only choice
CORRUPTION: Twelve other people were convicted on charges related to giving illegal benefits, forgery and money laundering, with sentences ranging from one to five years The Yilan District Court yesterday found Yilan County Commissioner Lin Zi-miao (林姿妙) guilty of corruption, sentencing her to 12 years and six months in prison. The Yilan District Prosecutors’ Office in 2022 indicted 10 government officials and five private individuals, including Lin, her daughter and a landowner. Lin was accused of giving illegal favors estimated to be worth NT$2.4 million (US$73,213) in exchange for using a property to conduct activities linked to the 2020 Chinese Nationalist Party (KMT) presidential and legislative election campaigns. Those favors included exempting some property and construction firms from land taxes and building code contraventions that would have required
TECH CORRIDOR: Technology centers and science parks in the south would be linked, bolstering the AI, semiconductor, biotech, drone, space and smart agriculture industries The Executive Yuan yesterday approved a “Southern Silicon Valley” project to promote the development of an artificial intelligence (AI) and semiconductor industry in Chiayi County, Tainan, Pingtung County and Kaohsiung. The plan would build an integrated “S-shaped semiconductor industry corridor” that links technology centers and science parks in the south, Executive Yuan spokesperson Michelle Lee (李慧芝) said yesterday after a Cabinet meeting. The project would bolster the AI, semiconductor, biotech, drone, space and smart agriculture industries, she said. The proposed tech corridor would be supported by government efforts to furnish computing power, workforce, supply chains and policy measures that encourage application and integration
RSS