Taiwan Dollar Strengthens as Exporters Buy Before Greek Vote

Taiwan’s dollar advanced amid speculation exporters are repatriating income before this weekend’s Greek elections, which may lead to a breakup of the euro. Government bonds declined.

Greece will vote June 17 on whether to back the Syriza party, led by Alexis Tsipras, who wants to renegotiate the terms of a European Union-led bailout. Taiwan’s dollar slumped 1.5 percent in the past month as Europe’s debt crisis worsened and signs of cooling demand in China and the U.S. dimmed the outlook for the island’s overseas sales. Data on June 20 may show export orders fell for a third month in May, according to the median estimate of economists in a Bloomberg survey.

“Exporters are selling the greenback before the Greek vote this weekend that may have a huge effect on the currency,” said Tarsicio Tong, a foreign-exchange trader at Union Bank of Taiwan (2838) in Taipei. “Also, it looks like there’s resistance at NT$30. It would be difficult for it to weaken beyond that level.”

Taiwan’s dollar strengthened 0.1 percent to NT$29.954 against its U.S. counterpart, according to Taipei Forex Inc. It touched NT$30.070 on June 5, the weakest level since Jan. 17. One-month implied volatility, a measure of exchange-rate swings used to price options, was little changed at 5.5 percent.

The yield on the 1.25 percent notes due March 2022 rose to 1.193 percent from 1.186 percent yesterday, according to Gretai Securities Market.

The overnight interbank lending rate was little changed at 0.51 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

To contact the reporter on this story: Andrea Wong in Taipei at awong268@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.