The euro on Friday sank to its lowest against the greenback in more than a year as a plunging Turkish lira sparked broad risk aversion, with investors worried about contagion to European banks.
Turkey’s lira plummeted as much as 18 percent on Friday as worries about Turkish President Tayyip Erdogan’s influence over monetary policy and worsening US relations snowballed into a market panic.
The euro was hurt after the Financial Times reported that the European Central Bank had concerns about banks in Spain, Italy and France and their exposure to Turkey’s woes.
Both currencies added to losses after US President Donald Trump said he had authorized a doubling of tariffs on steel and aluminum imports from Turkey.
“Our relations with Turkey are not good at this time!” Trump said on Twitter.
Exposure to Turkey could affect European banks’ bottom lines “and could have a domino effect throughout Europe as people begin to pull out of those banks and into the US. That’s why we’ve seen a spike in the dollar,” said Gregan Anderson, macroeconomic strategist at brokerage Bulltick LLC.
The euro dropped below technical support at US$1.15 to US$1.1414, down 0.97 percent on the day and the lowest since July last year.
For the week, the common currency fell 1.3 percent against the US dollar.
Against the yen, the euro slid 1.35 percent to ¥126.30, a more than two-month low and down nearly 2 percent for the week.
“You’ve had a fairly sharp move lower in the euro and it’s broken through key technical levels as well,” said Richard Franulovich, head of FX strategy at Westpac Banking Corp in New York.
Erdogan earlier told Turks to exchange gold and hard currency into lira, framing the crisis as a “national battle” against economic enemies.
“He spoke today sounding very combative and defiant instead of possibly offering a bit of fig leaf to the US,” Franulovich said.
The flight from risky assets heaped pressure on commodity-linked currencies, including the Australian dollar, which fell 1 percent to US$0.7280, an 18-month low.
In Taipei, the New Taiwan dollar fell against the US dollar rose, losing NT$0.082 to close at NT$30.708, little changed from last week’s NT$30.706.
The US dollar index edged only slightly higher after data on Friday showed that US core consumer prices rose 0.2 percent last month, in line with economists’ expectations and the same gain as in May and June. The index rose 1.2 percent for the week.
The British pound on Friday dropped to its lowest in more than a year on concerns about a “hard” Brexit.
Additional reporting by CNA, with staff writer
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last
US CONSCULTANT: The US Department of Commerce’s Ursula Burns is a rarely seen US government consultant to be put forward to sit on the board, nominated as an independent director Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, yesterday nominated 10 candidates for its new board of directors, including Ursula Burns from the US Department of Commerce. It is rare that TSMC has nominated a US government consultant to sit on its board. Burns was nominated as one of seven independent directors. She is vice chair of the department’s Advisory Council on Supply Chain Competitiveness. Burns is to stand for election at TSMC’s annual shareholders’ meeting on June 4 along with the rest of the candidates. TSMC chairman Mark Liu (劉德音) was not on the list after in December last