The New Taiwan dollar had its biggest weekly drop in more than a year as Europe’s sovereign debt crisis prompted investors to shun emerging-market assets and favor holding US dollars.
The currency slid for a third day as the central bank intervened in the final minutes of trading to buy the US dollar, said two traders familiar with the central bank’s operations, who declined to be identified.
Overseas funds sold US$1.8 billion more Taiwanese equities than they bought in the past five days, according to stock-exchange data.
“All banks now want to sell the Taiwan dollar and buy the US dollar because of the euro area’s collapse,” said Henry Lin, a foreign-exchange trader at Taiwan Shin Kong Commercial Bank (新光銀行) in Taipei. “Some exporters may sell the US dollar at NT$31.80.”
The Taiwan dollar fell 1.4 percent this week to NT$31.850 against its US counterpart at the 4pm close on Friday, according to Taipei Forex Inc. That was the biggest weekly drop since February last year. The benchmark TAIEX slipped for a ninth day, the longest losing streak since 2005.
Other Asian currencies also tumbled this week, with South Korea’s won and the Philippine peso posting their biggest losses in more than a year as Europe’s debt crisis drove investors from riskier assets.
The MSCI Asia-Pacific Index of regional shares had its worst week since February last year and the cost of protecting the region’s corporate bonds from default rose the most in 14 months.
The won declined 4.1 percent this week to 1,155.45 per US dollar and the peso slid 2.4 percent to 45.535. Malaysia’s ringgit dropped 2.7 percent, the most since a dollar peg ended in 2005. Indonesia’s rupiah gained 0.1 percent to 9,225 yesterday, trimming its weekly loss to 2.4 percent, on suspected intervention by the central bank.
India’s rupee also pared losses yesterday on suspected intervention, after touching a two-month low of Rs45.725 per dollar. The currency declined 2.5 percent to Rs45.4800 this week.
Elsewhere, Singapore’s dollar dropped 1.9 percent this week to S$1.3933 and the Thai baht was little changed at 32.35.
The euro fell the most against the US dollar since the collapse of global credit markets in 2008 as the European Central Bank (ECB) failed to ease concern that Greece’s fiscal crisis would intensify across the region.
The common currency on Friday surged the most in nearly four weeks on speculation the ECB may come to the aid of banks threatened by Greece’s crisis in an effort to halt contagion. The yen rose the most versus the US dollar in 11 weeks as a slide in stocks reduced demand for growth-related assets. The euro zone’s economy grew 0.1 percent in the first three months of the year, according to the median of a Bloomberg survey before a report on May 12.
The euro fell 4.1 percent this week, the most since the five days ended Oct. 24, 2008, to US$1.2755, from US$1.3294 on April 30. The common currency rose 1.1 percent on Friday, its first gain in a week. It declined 6.4 percent, also the most since October 2008, to ¥116.81, from ¥124.78.
The US dollar fell 2.4 percent to ¥91.59 this week, the biggest drop since February, from ¥93.85.
The pound touched a 13-month low of US$1.4477 against the greenback as Conservative David Cameron failed to win a majority in the House of Commons, increasing concern that the UK would be unable to tackle its fiscal deficit. For the week it declined 3.1 percent to US$1.4795, from US$1.5274.
PLA MANEUVERS: Although Beijing has yet to formally announce military drills, its coast guard vessels have been spotted near and around Taiwan since Friday The Taiwanese military is on high alert and is closely monitoring the Chinese People’s Liberation Army’s (PLA) air and naval deployments after Beijing yesterday reserved seven airspace areas east of its Zhejiang and Fujian provinces through Wednesday. Beijing’s action was perceived as a precursor to a potential third “Joint Sword” military exercise, which national security experts said the PLA could launch following President William Lai’s (賴清德) state visits to the nation’s three Pacific allies and stopovers in Hawaii and Guam last week. Unlike the Joint Sword military exercises in May and October, when Beijing provided detailed information about the affected areas, it
Five flights have been arranged to help nearly 2,000 Taiwanese tourists return home from Okinawa after being stranded due to cruise ship maintenance issues, the Ministry of Transportation and Communications announced yesterday. China Airlines Ltd (中華航空), and EVA Airways Corp (長榮航空) have arranged five flights with a total of 748 additional seats to transport 1,857 passengers from the MSC Bellissima back to Taiwan, the ministry said. The flights have been scheduled for yesterday and today by the Civil Aviation Administration, with the cruise operator covering all associated costs. The MSC Bellissima, carrying 4,341 passengers, departed from Keelung on Wednesday last week for Okinawa,
US president-elect Donald Trump said he would “never say” if Washington is committed to defending Taiwan from China, but “I would prefer that they do not do it [ an attack],” adding that he has a “good relationship” with Chinese President Xi Jinping (習近平). “I never say because I have to negotiate things, right?” Trump said in an interview with NBC’s Meet the Press host Kristen Welker after saying he would not reveal his incoming administration’s stance on Taiwan’s defense in the event of an attack. Asked the question again, Trump, in a reference to China, said: “I would prefer that they
CROSS-STRAIT TENSIONS: MOFA demanded Beijing stop its military intimidation and ‘irrational behavior’ that endanger peace and stability in the Indo-Pacific region The Presidential Office yesterday called on China to stop all “provocative acts,” saying ongoing Chinese military activity in the nearby waters of Taiwan was a “blatant disruption” of the “status quo” of security and stability in the Indo-Pacific region. Defense officials said they have detected Chinese ships since Monday, both off Taiwan and farther out along the first island chain. They described the formations as two walls designed to demonstrate that the waters belong to China. The Ministry of National Defense yesterday said it had detected 53 military aircraft operating around the nation over the past 24 hours, as well
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