The US dollar yesterday continued its upward momentum against the New Taiwan dollar, hitting a more than three-year high against the local currency on expectations that the US Federal Reserve would continue to aggressively raise interest rates.
The US dollar closed up NT$0.163 at NT$31.293, its highest since Sept. 4, 2019.
The greenback attracted strong buying soon after the local foreign exchange market opened as investors rushed to pick up the currency, betting that the Fed would act aggressively in a policymaking meeting scheduled for Tuesday and Wednesday next week, dealers said.
Photo: Chen Mei-ying, Taipei Times
The weakness of other regional currencies, including the yen, which fell to a new 24-year low, and the yuan, which breached the psychologically important 7 yuan per US dollar level, added more downward pressure on the NT dollar, dealers said.
Investors have been scrambling to move their funds out of Asia and into US dollar-denominated assets to take advantage of their higher interest rate yields, leading to the depreciation of global currencies against the greenback.
Expectations that the Fed would raise interest rates even higher next week were fueled after a higher-than-expected inflation report released on Tuesday and a stronger-than-expected retail sales report for last month released on Thursday, dealers said.
Over the week, the US dollar rose NT$0.398, or 1.3 percent, against the NT dollar, the eighth consecutive week of appreciation against the local currency.
Taiwan’s central bank appeared reluctant to intervene in the market to shore up the NT dollar because it was unlikely it could reverse the tide amid fund outflows, dealers said.
Some analysts believe that the US dollar trading above NT$31 would become a new normal and that the greenback could challenge NT$31.50 soon.
Taiwan Association of Machinery Industry chairman Larry Wei (魏燦文) said that if the US dollar were to rise further to above NT$32, it would help Taiwanese machinery exporters stay competitive against their Japanese competitors, who have benefited from a weakening yen.
Compared with a more than 11.6 percent drop in the NT dollar against the US dollar so far this year, the yen has tumbled about 25.8 percent, the association said, adding that the weakness of the Japanese currency has hurt the competitiveness of Taiwan’s machinery suppliers.
SEMICONDUCTORS: The firm has already completed one fab, which is to begin mass producing 2-nanomater chips next year, while two others are under construction Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, plans to begin construction of its fourth and fifth wafer fabs in Kaohsiung next year, targeting the development of high-end processes. The two facilities — P4 and P5 — are part of TSMC’s production expansion program, which aims to build five fabs in Kaohsiung. TSMC facility division vice president Arthur Chuang (莊子壽) on Thursday said that the five facilities are expected to create 8,000 jobs. To respond to the fast-changing global semiconductor industry and escalating international competition, TSMC said it has to keep growing by expanding its production footprints. The P4 and P5
DOWNFALL: The Singapore-based oil magnate Lim Oon Kuin was accused of hiding US$800 million in losses and leaving 20 banks with substantial liabilities Former tycoon Lim Oon Kuin (林恩強) has been declared bankrupt in Singapore, following the collapse of his oil trading empire. The name of the founder of Hin Leong Trading Pte Ltd (興隆貿易) and his children Lim Huey Ching (林慧清) and Lim Chee Meng (林志朋) were listed as having been issued a bankruptcy order on Dec. 19, the government gazette showed. The younger Lims were directors at the company. Leow Quek Shiong and Seah Roh Lin of BDO Advisory Pte Ltd are the trustees, according to the gazette. At its peak, Hin Leong traded a range of oil products, made lubricants and operated loading
The growing popularity of Chinese sport utility vehicles and pickup trucks has shaken up Mexico’s luxury car market, hitting sales of traditionally dominant brands such as Mercedes-Benz and BMW. Mexicans are increasingly switching from traditionally dominant sedans to Chinese vehicles due to a combination of comfort, technology and price, industry experts say. It is no small feat in a country home to factories of foreign brands such as Audi and BMW, and where until a few years ago imported Chinese cars were stigmatized, as in other parts of the world. The high-end segment of the market registered a sales drop
Citigroup Inc and Bank of America Corp said they are leaving a global climate-banking group, becoming the latest Wall Street lenders to exit the coalition in the past month. In a statement, Citigroup said while it remains committed to achieving net zero emissions, it is exiting the Net-Zero Banking Alliance (NZBA). Bank of America said separately on Tuesday that it is also leaving NZBA, adding that it would continue to work with clients on reducing greenhouse gas emissions. The banks’ departure from NZBA follows Goldman Sachs Group Inc and Wells Fargo & Co. The largest US financial institutions are under increasing pressure
RSS