Taiwan Dollar Reaches 3-Week High on Stock Inflows; Bonds Steady

Taiwan’s dollar touched the strongest level in three weeks as global funds added to holdings of the island’s stocks on optimism the economic recovery is gaining momentum. Government bonds were steady.

Foreign investors bought $1.4 billion more shares than they sold last month, and $285 million today, bringing net purchases in 2012 to $3.5 billion, according to exchange figures. Official data due this week will show exports rebounded in November and inflation slowed, Bloomberg surveys of economists show.

“Taiwan’s fundamentals are slowly getting better,” said Samson Tu, a Taipei-based fund manager at Uni-President Assets Management Corp., which oversees $700 million. “There’s some foreign buying of local stocks.”

Taiwan’s dollar was little changed at NT$29.121 against its U.S. counterpart as of the close and earlier reached NT$29.019, the strongest level since Nov. 13, based on Taipei Forex Inc. prices. It has appreciated 4 percent this year, the fifth-best performance among Asia’s 11-most traded currencies.

One-month implied volatility, a measure of expected moves in exchange rates used to price options, was little changed at 3.3 percent.

Figures due on Dec. 7 will show overseas shipments rose 7.8 percent from a year earlier, following a 1.9 percent drop the previous month, based on the median estimate of economists in a Bloomberg survey. Consumer prices probably increased 2.05 percent, compared with 2.36 percent in October, according to a separate survey before a government report on Dec. 5.

The yield on the government’s 1.125 percent bonds due September 2022 was little changed at 1.134 percent, according to Gretai Securities Market.

The overnight interbank lending rate was steady at 0.38 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: James Regan at jregan19@bloomberg.net

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