The yen on Friday posted its first weekly gain in nearly a month, driven by safe-haven demand as bank sector turmoil in the US unfolds, while the greenback fell as traders priced in more aggressive rate cuts from the US Federal Reserve.
The euro edged away from its recent one-year peak and closed at US$1.1018, after the European Central Bank (ECB) on Thursday slowed the pace of its interest rate increases with a 25-basis-point rise.
Although ECB President Christine Lagarde signaled more tightening to come, markets pared back their expectations on how much further rates would rise.
Photo: Reuters
“Lagarde was hawkish in her press conference, but I think financial markets didn’t really buy her view on further rate rises in coming months,” Commonwealth Bank of Australia currency strategist Carol Kong said.
In the broader currency market, the yen closed 0.42 lower against the greenback at ￥134.86 per US dollar, but posted a weekly gain of 1.1 percent, snapping three straight weeks of losses.
“The Japanese yen has slowly gained back its appeal of safe haven status, and has definitely been supported by concerns about US regional banks and the associated safe-haven demand,” Kong said.
A deepening crisis across US regional banks has kept investors on tenterhooks, with pressure growing on US regulators to take more steps to shore up the sector.
Shares of PacWest Bancorp plunged on Thursday, dragging other regional lenders down after the Los Angeles-based bank’s plan to explore strategic options heightened investor fears.
Canada’s Toronto-Dominion Bank Group the same day also called off its US$13.4 billion takeover of First Horizon Corp, in another sign of stress within the sector.
Traders have since priced in more aggressive rate cuts from the Fed, with Fed funds futures implying a small chance that cuts could come as soon as next month and through to the end of the year.
That left the greenback broadly lower on Friday, with the US dollar index slipping 0.12 percent to 101.28.
The Australian dollar was among the largest beneficiaries of the sliding dollar, rising more than 0.8 percent and touching multi-week highs.
The New Taiwan dollar gained against the US dollar on Friday, rising NT$0.025 to close at NT$30.641, up 0.32 percent from NT$30.740 a week earlier.
Sterling gained 0.47 percent to close at US$1.2633.
“For the Fed’s June decision, inflation data and employment indicators ... along with bank lending standards will be key to watch. The debt ceiling negotiations are another important risk,” said Sonia Meskin, head of US macro at BNY Mellon.
“We believe the Fed is unlikely to contemplate cutting rates before 2024.”
Additional reporting by CNA
PROTECTION: The investigation, which takes aim at exporters such as Canada, Germany and Brazil, came days after Trump unveiled tariff hikes on steel and aluminum products US President Donald Trump on Saturday ordered a probe into potential tariffs on lumber imports — a move threatening to stoke trade tensions — while also pushing for a domestic supply boost. Trump signed an executive order instructing US Secretary of Commerce Howard Lutnick to begin an investigation “to determine the effects on the national security of imports of timber, lumber and their derivative products.” The study might result in new tariffs being imposed, which would pile on top of existing levies. The investigation takes aim at exporters like Canada, Germany and Brazil, with White House officials earlier accusing these economies of
Teleperformance SE, the largest call-center operator in the world, is rolling out an artificial intelligence (AI) system that softens English-speaking Indian workers’ accents in real time in a move the company claims would make them more understandable. The technology, called accent translation, coupled with background noise cancelation, is being deployed in call centers in India, where workers provide customer support to some of Teleperformance’s international clients. The company provides outsourced customer support and content moderation to global companies including Apple Inc, ByteDance Ltd’s (字節跳動) TikTok and Samsung Electronics Co Ltd. “When you have an Indian agent on the line, sometimes it’s hard
‘SACRED MOUNTAIN’: The chipmaker can form joint ventures abroad, except in China, but like other firms, it needs government approval for large investments Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) needs government permission for any overseas joint ventures (JVs), but there are no restrictions on making the most advanced chips overseas other than for China, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. US media have said that TSMC, the world’s largest contract chipmaker and a major supplier to companies such as Apple Inc and Nvidia Corp, has been in talks for a stake in Intel Corp. Neither company has confirmed the talks, but US President Donald Trump has accused Taiwan of taking away the US’ semiconductor business and said he wants the industry back
PROBE CONTINUES: Those accused falsely represented that the chips would not be transferred to a person other than the authorized end users, court papers said Singapore charged three men with fraud in a case local media have linked to the movement of Nvidia’s advanced chips from the city-state to Chinese artificial intelligence (AI) firm DeepSeek (深度求索). The US is investigating if DeepSeek, the Chinese company whose AI model’s performance rocked the tech world in January, has been using US chips that are not allowed to be shipped to China, Reuters reported earlier. The Singapore case is part of a broader police investigation of 22 individuals and companies suspected of false representation, amid concerns that organized AI chip smuggling to China has been tracked out of nations such
RSS