Taiwan's Dollar Gains a Fourth Day as Exports Rise Faster Than Forecast
Taiwan’s dollar rose for a fourth day after the government reported export growth that beat economists’ estimates and overseas investors increased holdings of the island’s shares.
Shipments climbed 39 percent last month from a year earlier, accelerating from a 34 percent pace in June, the Ministry of Finance said late yesterday just before markets closed. The median estimate in a Bloomberg survey was for a 31 percent rise. The currency has appreciated 1 percent this month as global funds bought $937 million more Taiwan equities than they sold, according to stock exchange data.
“It seems the central bank has softened up on intervention because export figures are getting a lot better,” said Albert Lee, a fixed-income trader at Cathay United Bank in Taipei. “Exporters are also taking advantage of the weaker greenback” and buying the local dollar, he said.
Taiwan’s dollar strengthened 0.1 percent to NT$31.75 against its U.S. counterpart as of 10:17 a.m., according to Taipei Forex Inc. It rose to NT$31.62 on Aug. 4, the highest level since May 13.
The currency has pared gains or weakened in the final minutes of trading on most days in the past four months as policy makers bought U.S. dollars to prevent appreciation that may hurt exports, according to traders familiar with the central bank’s operations who declined to be identified.
Taiwan’s government bonds dropped for a fourth day, the longest losing streak in two months.
The yield on the 2 percent note maturing in July 2015 dropped one basis point to 0.925 percent, according to Gretai Securities Market, the island’s biggest exchange for bonds. A basis point is 0.01 percentage point.
To contact the reporters on this story: Andrea Wong in Hong Kong at at awong268@bloomberg.net
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