Taiwan Dollar Touches 2-Week Low on Growth Concern; Bonds Steady

Taiwan’s dollar touched a two-week low on concern the island’s economic growth is losing momentum. Government bonds were steady before an auction tomorrow.

The currency retreated for a fourth day as official data showed export orders slumped 4.4 percent in July, more than the 2.98 percent decline forecast in a Bloomberg survey. The statistics bureau cut its 2012 economic growth forecast to 1.66 percent from 2.08 percent on Aug. 17 after a government report showed gross domestic product fell 0.18 percent in the second quarter from a year earlier, following a 0.16 percent decrease in the previous three months.

“There aren’t any fundamentals supporting an appreciation of the Taiwan dollar,” said Tarsicio Tong, a foreign-exchange trader at Union Bank of Taiwan. “It should continue to weaken.”

Taiwan’s dollar closed at NT$30.030 against its U.S. counterpart, compared with NT$30.025 on Aug. 17, according to Taipei Forex Inc. That’s the weakest level since Aug. 3. The currency will reach NT$32 within a month, Tong predicted. One- month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 3.40 percent.

Government bonds were steady before the Ministry of Finance sells NT$30 billion ($999 million) of 30-year debt tomorrow. The yield on Taiwan’s 1.25 percent notes due March 2022 was 1.181 percent, according to Gretai Securities Market. The overnight money-market rate was little changed at 0.386 percent, according to a weighted average compiled by the Taiwan Interbank Money Centre.

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

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

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to 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.