News of a SARS-CoV-2 variant potentially resistant to current vaccines sent investors dashing for the safety of the Japanese yen and the Swiss franc on Friday, and traders also took profits after an extended rally in the US dollar.
The gains in the yen and the Swiss franc came at the expense of the growth-sensitive Australian dollar and Norwegian krone, although thinner volumes after Thursday’s US Thanksgiving holiday made market moves more volatile.
The US is to restrict travel from South Africa — where the new mutation was discovered — and neighboring countries beginning tomorrow, a senior official from the administration of US President Joe Biden said.
The WHO said it was designating the variant, named Omicron, as “variant of concern,” a label applied only to four variants to date. It could take weeks for scientists to fully understand the variant’s mutations and potential dangers.
“If we’re looking at something like this where we have new mutations on mutations of a spike protein it almost feels like the initial working assumption for most market participants is that this is a new phase of the pandemic,” said Bipan Rai, North American head of FX strategy at CIBC Capital Markets in Toronto.
“New lockdowns and restrictions will maybe be put in place, and it certainly feels like we’re going to need a new vaccine as well,” he added.
One of the main gainers was the yen, which bounced off five-year lows hit this week against the greenback, and jumped almost 2 percent to a high of ￥113.09, its best day since March last year.
The euro rose 0.97 percent to a high of US$1.1312, although it fell to more than six-year lows against the resurgent Swiss franc, at SF1.0428 per euro.
“This is a textbook flight to quality into yen and the Swiss franc on the new virus strain, with the thin liquidity also a factor, which may accelerate the unwinding of short bond positions,” Kenneth Broux, a strategist at Societe Generale SA in London, said.
Speculative accounts had been massively short safe-haven assets, with US CFTC figures showing net bearish positioning at US$1.2 billion and US$10.3 billion for the yen and Swiss franc respectively in the latest week.
In Taipei, the New Taiwan dollar on Friday fell against the US dollar, losing NT$0.035 to close at NT$27.836, down 0.15 percent weekly.
The US dollar index on Friday dipped 0.75 percent to 96.030, after reaching a 16-month high of 96.938 on Wednesday. The index is unchanged for the week.
It has jumped from 93.872 on Nov. 9 as investors increased bets that the US Federal Reserve will begin raising interest rates in mid-2022 to thwart stubbornly high inflation.
Sterling briefly slipped to a new low for this year below US$1.3278 as the jitters prompted some to scale back bets on an interest rate hike next month.
In the cryptocurrency market, bitcoin fell to as low as US$53,524, the lowest since Oct. 10, while ethereum dropped to US$3,917, the lowest since Oct. 28.
Additional reporting by CNA, with staff writer
RECYCLE: Taiwan would aid manufacturers in refining rare earths from discarded appliances, which would fit the nation’s circular economy goals, minister Kung said Taiwan would work with the US and Japan on a proposed cooperation initiative in response to Beijing’s newly announced rare earth export curbs, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. China last week announced new restrictions requiring companies to obtain export licenses if their products contain more than 0.1 percent of Chinese-origin rare earths by value. US Secretary of the Treasury Scott Bessent on Wednesday responded by saying that Beijing was “unreliable” in its rare earths exports, adding that the US would “neither be commanded, nor controlled” by China, several media outlets reported. Japanese Minister of Finance Katsunobu Kato yesterday also
Jensen Huang (黃仁勳), founder and CEO of US-based artificial intelligence chip designer Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Friday celebrated the first Nvidia Blackwell wafer produced on US soil. Huang visited TSMC’s advanced wafer fab in the US state of Arizona and joined the Taiwanese chipmaker’s executives to witness the efforts to “build the infrastructure that powers the world’s AI factories, right here in America,” Nvidia said in a statement. At the event, Huang joined Y.L. Wang (王英郎), vice president of operations at TSMC, in signing their names on the Blackwell wafer to
‘DRAMATIC AND POSITIVE’: AI growth would be better than it previously forecast and would stay robust even if the Chinese market became inaccessible for customers, it said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its full-year revenue growth outlook after posting record profit for last quarter, despite growing market concern about an artificial intelligence (AI) bubble. The company said it expects revenue to expand about 35 percent year-on-year, driven mainly by faster-than-expected demand for leading-edge chips for AI applications. The world’s biggest contract chipmaker in July projected that revenue this year would expand about 30 percent in US dollar terms. The company also slightly hiked its capital expenditure for this year to US$40 billion to US$42 billion, compared with US$38 billion to US$42 billion it set previously. “AI demand actually
Taiwan-based GlobalWafers Co., the world’s third largest silicon wafer supplier, on Wednesday opened a 12-inch silicon wafer plant in Novara, northern Italy - the country’s most advanced silicon wafer facility to date. The new plant, coded “Fab300,” was launched by GlobalWafers’ Italian subsidiary MEMC Electronics Materials S.p.A at a ceremony attended by Taiwan’s representative to Italy Vincent Tsai (蔡允中), MEMC President Marco Sciamanna and Novara Mayor Alessandro Canelli. GlobalWafers Chairwoman Doris Hsu (徐秀蘭) said the investment marked a milestone in the company’s expansion in Europe, adding that the Novara plant will be powered entirely by renewable energy - a reflection of its
RSS