The US dollar on Friday fell to a five-week low, remaining under pressure for a third straight session after the US Federal Reserve quashed hopes for a further currency bull run by keeping a gradual rate-hiking pace.
“At the moment, the [US] dollar remains in correction mode, which we had fully expected,” London-based Forex.com market analyst Fawad Razaqzada said. “But we remain fundamentally bullish on the greenback, because the Fed remains the only major central bank which is actively tightening its policy.”
James Chen, head of research at Forex.com in Bedminster, New Jersey, also said that the pace of Fed rate hikes and policy outlooks can change extremely quickly.
He said that only a few weeks before Wednesday’s Fed announcement, expectations for a hike this month were exceptionally low.
However, Fed officials made a concerted effort to warn the markets of the high likelihood of a Fed rate hike and expectations then soared to a near-certainty, Chen said.
“This same rapid change in expectations could very likely occur again at any time, assuming the [US President Donald] Trump administration’s fiscal plans begin to take root.”
The surge in the US dollar in the weeks after the US election in November last year was largely due to expectations of increased spending.
However, a higher US budget deficit is likely to dampen that view.
Jane Foley, senior foreign-exchange strategist at Rabobank in London, said she sees the risk that any additional spending might not happen until the end of the year, or potentially next year.
“That disappointment over the reflationary outlook could weigh on the [US] dollar in the coming months,” she said.
In late trading on Friday, the US dollar index slipped 0.1 percent to 100.30.
The index is down about 1 percent for the week and 1.2 percent since the Fed raised rates on Wednesday.
In Taipei, The New Taiwan dollar on Friday rose against the greenback on foreign fund inflows, gaining NT$0.031 to close at NT$30.626. For the week, the NT dollar is up 1.3 percent against the US dollar from last week’s NT$31.036.
Foreign institutional buying in the local equity market on Friday weakened the US dollar throughout the session, causing it to fall for the third day in a row, dealers said.
Against the yen, the US dollar fell to a two-week low and at 112.68 yen.
The euro, meanwhile, fell against the US dollar after a poll showed far-right anti-EU French politician Marine Le Pen extending her lead over centrist Emmanuel Macron in the first round of France’s presidential elections.
The euro on Friday fell 0.2 percent to US$1.0740, but was up 0.4 percent from last week’s US$1.0698.
Additional reporting by CNA
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Huawei Technologies Co’s (華為) latest smartphones carry a version of the advanced made-in-China processor it revealed last year, results from an independent analysis showed. This underscored the Chinese company’s ability to sustain production of the controversial chip. The Pura 70 series unveiled last week sports the Kirin 9010 processor, research firm TechInsights found during a teardown of the device. This is a newer version of the Kirin 9000s, made by Semiconductor Manufacturing International Corp (SMIC, 中芯) for the Mate 60 Pro, which had alarmed officials in Washington who thought a 7-nanometer chip was beyond China’s capabilities. Huawei has enjoyed a resurgence since
purpose: Tesla’s CEO sought to meet senior Chinese officials to discuss the rollout of its ‘full self-driving’ software in China and approval to transfer data they had collected Tesla Inc CEO Elon Musk arrived in Beijing yesterday on an unannounced visit, where he is expected to meet senior officials to discuss the rollout of "full self-driving" (FSD) software and permission to transfer data overseas, according to a person with knowledge of the matter. Chinese state media reported that he met Premier Li Qiang (李強) in Beijing, during which Li told Musk that Tesla's development in China could be regarded as a successful example of US-China economic and trade cooperation. Musk confirmed his meeting with the premier yesterday with a post on social media platform X. "Honored to meet with Premier Li