Taiwan Dollar Falls for Eighth Day on Europe; Bonds Advance
Taiwan’s dollar declined for an eighth day, the longest losing streak since February 2009, as Europe’s deepening debt crisis spurred investors to favor safer bets than emerging-market stocks. Bonds gained.
Foreign funds sold $328 million more Taiwan stocks than they bought today, bringing net sales this week to $841 million, according to exchange data. The currency touched a six-month low before a report next week that will show export orders, an indication of shipments in the next one to three months, rose 7.6 percent in August from a year earlier, compared with an increase of 11.1 percent the previous month, according to the median estimate in a Bloomberg survey.
“Lingering worries over the euro zone’s debt problems seem to be weighing on investor sentiment,” said Emmanuel Ng, a currency strategist at Oversea-Chinese Banking Corp. in Singapore. “This is probably causing selling of Asian currencies.”
Taiwan’s dollar dropped 0.5 percent to NT$29.625 against its U.S. counterpart as of the 4 p.m. local time close, according to Taipei Forex Inc. It reached NT$29.700 earlier, the weakest level since Feb 25.
The yield on the 2 percent notes due July 2016 fell one basis point, or 0.01 percentage point, to 0.953 percent in Taipei, according to Gretai Securities Market.
Yields declined 27 basis points from this year’s high of 1.21 percent reached on July 29 to a record low 0.94 percent on Sept. 6, as the faltering global economic recovery boosted demand for the perceived safety of sovereign debt. The Central Bank of China (Taiwan) will meet on Sept. 29 to review the discount rate after raising it twice this year, by 12.5 basis points each time, to 1.875 percent.
“Bond yields went down tremendously because of speculation our central bank won’t raise the rate at the end of September,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei.
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