US dollar edges lower as risk appetite returns
US dollar edges lower as risk appetite returns
Reuters, NEW YORK
The US dollar edged lower on Friday, along with the Japanese yen, as riskier currencies were favored, with a rally in US Treasuries running out of steam and global stock markets steadying.
Some soft US data, along with a surge in COVID-19 cases in many parts of the world, has fueled concerns that the global economic recovery was running out of steam, leading to an eight-day streak of declines for the 10-year Treasury yield that ended on Friday.
“This week was all about the bond market and the collapse in Treasury yields,” said Edward Moya, senior market analyst for the Americas at Oanda Corp. “Some of that move was probably overdone.”
The rise in yields supported riskier assets and currencies, with global stock markets rising and the commodity-linked Australian and New Zealand dollars catching a bid.
The Australian dollar rose 0.79 percent to US$0.74905, after earlier touching a fresh low for the year at US$0.7410, and the New Zealand dollar added 0.81 percent to US$0.7002, having plunged more than 1 percent in the previous session.
In Taipei, the New Taiwan dollar fell against the greenback, losing NT$0.052 to close at NT$28.086, down 0.34 percent for the week.
The euro extended gains on top of a 0.45 percent jump on Thursday, rising 0.27 percent to US$1.1876.
The US dollar index slid 0.34 percent to 92.10, down 0.1 percent for the week.
The greenback’s decline was likely due in part to profit-taking ahead of key US inflation data for last month due next week, Western Union Business Solutions senior market analyst Joe Manimbo said.
“Dollar bulls are just pulling some chips off the table,” he said.
The yen, perceived as a safe-haven currency, declined as risk appetite began to recover.
“Yesterday’s decline in dollar-yen is reversing together with risk appetite in equities suggesting no wider spillover effects across markets for now — the same move is seen in the US 10-year yield bouncing back above 1.3 percent,” Saxo Bank A/Schief investment officer Steen Jakobsen said.
The yen eased 0.39 percent to ￥110.185 per US dollar, giving back some of its gains against the greenback from Thursday, when it had its biggest daily rise since November last year.
The Canadian dollar strengthened 0.61 percent against the US dollar to US$1.2453 as oil prices rose and data showed that Canada added more jobs than expected last month as public health restrictions were eased in several regions of the country.
Elsewhere, the People’s Bank of China said it would cut the reserve requirement ratio — the percentage of deposits lenders must hold on to — for all banks by 50 basis points, effective from Thursday, helping spur the move back into riskier assets.
Additional reporting by CNA, with staff writer
Cathay Financial reports NT$12.95bn in profit, making up for loss last year
Cathay Financial reports NT$12.95bn in profit, making up for loss last year
By Kao Shih-ching / Staff reporter
Cathay Financial Holding Co (國泰金控) on Sunday reported a net profit of NT$12.95 billion (US$462.25 million) for last month, compared with a net loss of NT$1.1 billion a year earlier due to recognition of a NT$8.8 billion investment loss in Indonesia’s Bank Mayapada International Tbk PT.
The company’s life insurance unit, Cathay Life Insurance Co (國泰人壽), generated net profit of NT$11.48 billion last month, doubling from NT$5 billion a month earlier.
Profit was pushed up by the New Taiwan dollar weakening against the US dollar last month, which helped reduce the insurer’s foreign-exchange hedging costs, as well as by the booming global financial markets, it said.
The headquarters of Cathay Financial Holding Co is pictured in Taipei in an undated photograph. Photo courtesy of Cathay Financial Holding Co
In addition to the life insurer’s book value surpassing NT$730 billion, its risk-based capital exceeded 360 percent to reach a record high, which indicated that it would be able to weather any coming volatility, it said.
For the first six months, Cathay Financial’s cumulative net profit was NT$91.46 billion, up 183 percent from NT$32.25 billion a year earlier, reaching a record high, the company said, adding that earnings per share were NT$6.65.
Cathay Life’s cumulative net profit in the first six months advanced 292 percent year-on-year to NT$77.52 billion, it said.
Fubon Financial Holding Co (富邦金控) reported that net profit surged 324 percent annually to NT$12.87 billion last month, as its life insurance arm, Fubon Life Insurance Co (富邦人壽), took advantage of booming markets to seize capital gains, making a net profit of NT$9.37 billion, up 245 percent year on year, the company said in a statement.
As Fubon Financial had obtained a 55.76 percent stake in Jih Sun Financial Holding Co (日盛金控), it last month recognized NT$240 million as an investment gain, which was more than half of Jih Sun’s net profits of NT$428 million last month, it said.
For the first six months, Fubon Financial saw its net profit rise 135 percent year-on-year to NT$87.61 billion, second only to Cathay Financial, but Fubon’s earning per share of NT$8.29 ranked first among all financial conglomerates, it said.
Taishin Financial Holding Co (台新金控) reported net profit of NT$5.94 billion for last month, which was not only about seven times higher than the NT$770 million it recorded a month earlier, but also ranked the company third in terms of profits among all financial conglomerates last month, corporate data showed.
Taishin Financial attributed the rising profit to recognition of an investment gain of NT$9.18 billion, as at the end of last month it closed a deal to fully acquire Prudential Life Insurance Co of Taiwan (保德信人壽), which was renamed Taishin Life Insurance Co Ltd (台新人壽), it said.