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Time of India
05-05-2025
- Business
- Time of India
Taiwan dollar posts sharpest surge since 1988 amid trade deal speculation with US
AI generated image, the picture may not represent Taiwan's actual currency Taiwan's dollar has surged the most since 1988 as traders speculate that authorities might allow the currency to appreciate to help reach a trade deal with the US. The local dollar rose as much as 5% on Monday. In an emergency press briefing late Monday, Taiwan's central bank sought to quell speculation about the currency's surge, saying that the wild two-day appreciation was partially attributable to market chatter and urged against irresponsible speculation, as reported by Bloomberg. It also reiterated that the US did not require the currency to appreciate. Taiwan's office of trade negotiations also said that it had wrapped up a first round of tariff-reduction negotiations with the US and that the talks did not touch upon the issue of foreign exchange policy. US President Donald Trump has previously advocated a weaker US dollar to boost America's competitiveness. Bloomberg reported that others pointed to US dollar hedging by Taiwan's life insurance companies as also giving the local currency extra momentum. Separately, the markets regulator has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening Taiwan dollar has impacted their operations, people familiar with the matter said. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Nerves Trouble? Telangana Residents Are Trying This Odd Trick (See How) Nerve Relief Read More Undo 'Local exporters are panicking, and local lifers are under-hedged, while equity-related outflows have ceased,' said Ju Wang, head of Greater China foreign-exchange and rates at BNP Paribas SA in Hong Kong. 'The central bank remains the only buyer but has not been aggressively supporting the market, fueling speculation that currency valuation is part of the trade talks.' Taiwan Semiconductor Manufacturing Co. dropped 1.3% on concern the stronger currency will dent its export earnings. The volume of US dollar-Taiwan dollar trades in Taipei early Monday jumped to the most since the 2008 global financial crisis. Banks have been bombarded with customer inquiries over the surge, with Cathay United Bank Co. introducing virtual queues on its online app to 'maintain system stability. ' Despite the currency's gains, Taiwan's monetary authority hadn't been seen aggressively intervening in the market Monday to limit its strength, though it typically does so to smooth out volatility. The recent tolerance of the central bank 'for Taiwan dollar appreciation likely reflects a broader policy recalibration,' Christopher Wong, a senior foreign-exchange strategist at Oversea-Chinese Banking Corp. in Singapore, said before the central bank's briefing. 'A more market-determined TWD ahead of negotiations may also be helpful during trade talks.' Currencies have also rallied across Asia in recent weeks as the US dollar has faltered on concern US President Donald Trump's tariff war will hurt the world's largest economy. The Taiwan dollar appreciated to as strong as 29.59 to the US currency during the trading day. It was at 30.14 as of 9:24 a.m. in New York. It has advanced more than 10% over the past month. A large chunk of the insurers' stockpile of US bonds — including corporate debt and Treasuries — is partially or completely unhedged, meaning they are more vulnerable to losses should the dollar weaken. The companies own about NT$575 billion of US Treasuries, according to the latest data from Taiwan's Financial Supervisory Commission. 'The moves over the past two sessions were really unprecedented, and if you're exposed to the dollar as a lifer with little to no hedging, it'd been a painful ride,' says Mingze Wu, currency trader at Stonex in Singapore. 'Taiwan life insurers are among the biggest holders of US bonds in Asia, so it makes sense that they'd be on their toes right now.' Taiwan is on the US Treasury's 'monitoring list' for foreign-exchange practices, and a stronger local dollar may be seen as another olive branch in negotiations. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Bloomberg
05-05-2025
- Business
- Bloomberg
European Banks Reach for the Silver Linings Playbook
European bank stocks have solidly beaten their American rivals for well over two years, and the signs are that President Donald Trump's chaotic assault on global politics and trade will continue to fuel that trend. BNP Paribas SA of France gave a surprisingly upbeat outlook as the first from the region to report quarterly earnings Thursday, raising hopes that its peers will also have good news for investors this week. The big theme is America's trade-war disruption should be offset by investment ramping up in Europe and corporate clients seeking new supply chains and markets to sell into. On the pure finance side, corporate treasurers are looking to diversify sources of funding and investors are considering havens away from dollar-denominated markets, which should also help Europe's bankers.
Mint
28-04-2025
- Business
- Mint
European Banks Reach for the Silver Linings Playbook
(Bloomberg Opinion) -- European bank stocks have solidly beaten their American rivals for well over two years, and the signs are that President Donald Trump's chaotic assault on global politics and trade will continue to fuel that trend. BNP Paribas SA of France gave a surprisingly upbeat outlook as the first from the region to report quarterly earnings Thursday, raising hopes that its peers will also have good news for investors this week. The big theme is America's trade-war disruption should be offset by investment ramping up in Europe and corporate clients seeking new supply chains and markets to sell into. On the pure finance side, corporate treasurers are looking to diversify sources of funding and investors are considering havens away from dollar-denominated markets, which should also help Europe's bankers. This is an earnings season where what's happened since the close of the first quarter is far more important than what came within it: Trump's so-called Liberation Day, when he launched trade taxes on imports from anywhere and everywhere, landed fewer than than four weeks ago, on April 2. BNP Paribas's first-quarter report was similar to those of US banks in some ways. Stock trading was spectacular, with volatility already stoked by Trump's confusing policies, while dealmaking and primary capital markets businesses were undermined by the uncertainty. Other European investment banks will doubtless have experienced the same pattern. BNP's equities revenue was up 39% in dollar terms versus the same period last year, beating the US average of nearly 31% in the first three months of the year. Only JPMorgan Chase & Co. and Morgan Stanley did better among US banks. In Europe, UBS Group AG, Barclays Plc and Societe Generale SA ought to have benefited from the same following winds. For deals, initial public offerings and other fundraising, the story was common, too: Companies and private equity have little choice but to wait for the White House to end the fights it has started with friends and foes around the world. But Trump's whirlwind will bring benefits to Europe. The promise of a wave of reinvestment by both governments and companies should mean more financing in the medium term at least. At the same time, steeper yield curves everywhere are boosting net interest income because deposit rates are falling while longer-term lending and government bond rates remain higher — apart from in Switzerland, meaning UBS will likely miss out. Jean-Laurent Bonnafe, chief executive officer of BNP, said more spending was inevitable: 'Europe has no choice but to reinvest,' he told investors on the earnings call. However, he cautioned it wouldn't be in the coming months, but in the next two to five years. Still, the interest income rebound will be swift, supporting BNP's target of greater than 5% annual revenue growth over the next three years, according to Bank of America Corp. analysts. Deutsche Bank AG could benefit particularly from German defense spending, but it won't enjoy the bounce in equity trading, having quit that business several years ago, and it could suffer markdowns on leveraged loans it's failed to shift, according to analysts at Citigroup Inc. The other surprising bit of good news from BNP was on trade finance, an area that seemed an obvious casualty in a trade war. Despite reports of cancelled orders, plunging container volumes out of China and even of exporters dumping goods at sea, BNP said trade finance volumes were up. That was partly due to importers building inventory ahead of tariffs kicking in, but also because companies were trying to diversify their suppliers and their export markets. More varied trade around the global south and between Europe and Asia could be a positive story in the outlooks of HSBC Holdings Plc and Standard Chartered Plc this week, too. Big US banks like JPMorgan still have far more capital and much higher stock valuations than their European rivals. But the Americans spent earnings season fretting about the cloud of recession heading their way; lenders in Europe look like they might have a lot more to say about silver linings. More from Bloomberg Opinion: This column reflects the personal views of the author and does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners. Paul J. Davies is a Bloomberg Opinion columnist covering banking and finance. Previously, he was a reporter for the Wall Street Journal and the Financial Times.
Bloomberg
24-04-2025
- Business
- Bloomberg
BNP Paribas' Equity Trading Surges to Record Amid Rising Costs
BNP Paribas SA reported record income from equities trading as the French lender rode the global market volatility in the first quarter of this year. The French lender on Thursday reported a 42% surge in equities trading revenue to €1.19 billion ($1.35 billion) in the three months through March, beating even the most optimistic analyst estimate. It was also the highest in data compiled by Bloomberg and going back to 2007.
Bloomberg
17-04-2025
- Business
- Bloomberg
BNP's Loan Losses; Pharma Braces for Tariffs: EMEA Earnings Week Ahead
By and Maggie Shiltagh Save BNP Paribas SA will kick off European bank earnings next week, as investors assess the impact of tariffs on the continent's biggest lenders. The French bank faces one of the most substantial hits to profit with loan losses expected to surge. A 50% jump in cost of risk estimates this year would slash consensus for European banks' pretax profit by 10%, Bloomberg Intelligence calculated, with BNP looking at an 11% hit. Other byproducts of a trade war, like rate cuts and fewer deals, present additional threats to revenue.
