Taiwan Dollar Falls as Exports Forecast to Decline; Bonds Steady

Taiwan’s dollar declined the most this week before government data that may show the island’s export orders shrank for a fifth straight month in July as demand from China and Europe waned.

A government report on Aug. 20 may show export orders dropped 2.9 percent in July from a year earlier, following a 2.6 percent decline in June, according to the median forecast in a Bloomberg survey. South Korea, India and Indonesia all reported slides in overseas sales this month. Taiwan’s economy shrank in the second quarter for the first time since 2009.

“The export slowdown is becoming a bit synchronized now across Asia,” said Jackit Wong, an economist in Hong Kong at Natixis Asia Ltd. “There is no sign of a recovery yet in overseas demand so there isn’t much room for currencies to appreciate.”

Taiwan’s dollar fell 0.1 percent to close at NT$30.002 against its U.S. counterpart, according to Taipei Forex Inc. One-month implied volatility, a measure of exchange-rate swings used to price options, was little changed at 3.40 percent.

The statistics office estimated on July 31 the island’s gross domestic product declined 0.16 percent last quarter from a year earlier. A final reading, to be published on Aug. 17, may confirm the estimate, a Bloomberg News survey shows.

The yield on Taiwan’s 1.25 percent bonds due March 2022 was steady at 1.18 percent, according to Gretai Securities Market. The overnight money-market rate was little changed at 0.389 percent, according to a weighted average compiled by the Taiwan Interbank Money Centre.

To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net.

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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