Taiwan’s dollar rose to a one-month high after better-than-expected Chinese manufacturing data spurred optimism growth in Asia’s largest economy remains intact. Bonds (GVTWTO5) fell by the most in more than two weeks.
A purchasing managers’ index advanced to a one-year high of 53.1 in March, official data showed yesterday, compared with the median estimate of economists surveyed by Bloomberg for a reading of 50.8. The island ships around 30 percent of its products to China, according to trade ministry data. Taiwan’s consumer-price index increased 1.27 percent in March from a year earlier, after a 0.25 percent gain the previous month, according to a Bloomberg survey before data due April 5.
Taiwan’s dollar strengthened 0.1 percent to NT$29.506 against its U.S. counterpart, according to Taipei Forex Inc. It touched NT$29.380 earlier, the strongest level in a month. One- month implied volatility, a measure of exchange-rate swings that traders use to price options, was little changed at 4 percent.
The yield on the government’s 1 percent bonds due January 2017 climbed two basis points, or 0.02 percentage point, to 1.02 percent, according to Gretai Securities Market. That’s the biggest increase for benchmark five-year rates since March 15.
Taiwan’s central bank left the benchmark interest rate unchanged at 1.875 percent on March 22 and said it will focus on inflation rather than boosting growth in 2012.
“Traders are speculating maybe the central bank will have to do something later this year,” Lee said.
The overnight money-market increased one basis point to 0.425 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.
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