House Has Enough Votes to Pass Budget Easing $63 Billion in Cuts
Taiwan Dollar Touches Six-Month Low on Growth Woes; Bonds Steady
Taiwan’s dollar fell to the weakest level in more than six months after data showed factory output fell in June. Government bonds were little changed.
Industrial production dropped 2.44 percent last month from a year earlier, following a 0.21 percent decline in May, official data showed yesterday. Asian stocks dropped for a third day after Moody’s Investors Service cut credit-rating outlooks for Germany, the Netherlands and Luxembourg to negative.
“The question is whether the global economy will slip into recession again,” said Tarsicio Tong, a foreign-exchange trader at Union Bank of Taiwan. (2838) “The currency’s depreciating trend will only continue under this environment.”
The Taiwan dollar slipped 0.1 percent to NT$30.116 against its U.S. counterpart, according to Taipei Forex Inc, after touching NT$30.150 earlier, the weakest level since Jan. 10. It will fall to NT$30.200 within a month, according to Tong.
One-month implied volatility, a measure of exchange-rate swings used to price options, climbed 26 basis points, or 0.26 percentage point, to 3.7 percent.
The yield on the 1.25 percent bonds due March 2022 was little changed at 1.14 percent, according to Gretai Securities Market. The overnight money-market rate was steady at 0.392 percent, after touching 0.389 percent yesterday, the lowest level since August, according to a weighted average compiled by the Taiwan Interbank Money Centre.
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