Taiwan Dollar Rises on Optimism Central Bank Will Allow Gains
Taiwan’s dollar rose on optimism the central bank will tolerate greater appreciation after the currency closed at its strongest level in almost three years yesterday.
The local dollar rose 0.4 percent yesterday after having reversed gains in the final minutes of trading in the previous two days. The monetary authority has been limiting gains in the Taiwan dollar toward the close of trading almost every day since April, according to traders who declined to be identified as the authority doesn’t disclose such details usually.
“Looks like the central bank wants to minimize intraday volatility,” said Henry Lin, a Taipei-based foreign-exchange trader at Taiwan Shin Kong Commercial Bank. “The trend for the Taiwan dollar to rise will continue.”
Taiwan’s dollar gained 2.7 percent to NT$29.315 against its U.S. counterpart as of 9:14 a.m. local time, according to Taipei Forex Inc. The currency has advanced 3.7 percent since Dec. 31, poised for a sixth weekly advance.
The Ministry of Finance will say today exports increased 20 percent in December from a year earlier, a 14th month of gains, according to 13 economists in a Bloomberg survey.
Government bonds rebounded from losses yesterday. The yield on the 1 percent note due January 2016 fell one basis point to 1.076 percent, according to Gretai Securities Market, the island’s biggest debt exchange. The rate fell four basis points this week. A basis point is 0.01 percentage point.
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