Taiwan Dollar Touches Two-Week High as Stocks Gain on U.S. Data

Taiwan’s dollar touched a two-week high as local stocks rallied after the unemployment rate in the U.S., the island’s second-biggest export market, dropped to a five-year low. Government bonds advanced.

The Taiex index jumped 0.9 percent, the most since Oct. 15, after data released Dec. 6 showed the U.S. jobless rate fell to 7 percent as employers added 203,000 positions in November, beating the 185,000 median estimate in a Bloomberg survey of economists. The Bloomberg-JPMorgan Asia Dollar Index gained 0.4 percent last week, the most in two months.

“The stock market jumped after the strong U.S. employment data,” said Samson Tu, a Taipei-based fund manager at Uni-President Assets Management Corp. “Asian currencies have stabilized recently and investors are becoming more optimistic about riskier assets, which has given some support for emerging-market currencies.”

Taiwan’s dollar strengthened 0.1 percent to NT$29.630 against the greenback, prices from Taipei Forex Inc. show. It rose as much as 0.4 percent to NT$29.540 earlier, the strongest level since Nov. 25. One-month non-deliverable forwards were little changed at NT$29.520, data compiled by Bloomberg show.

The local dollar fell 0.2 percent in the last 18 minutes of trading amid suspected central bank intervention. The monetary authority has sold the local currency in the run-up to the close on most days since March 2012, according to traders who asked not to be identified.

Bonds Gain

Taiwan’s exports were unchanged from a year earlier in November, data showed today, missing the median estimate for 2 percent growth in a Bloomberg survey of economists. Imports contracted 0.5 percent, compared with a forecast 1.7 percent increase.

The yield on the 1.75 percent sovereign bonds due September 2023 fell three basis points, or 0.03 percentage point, to 1.677 percent, according to Gretai Securities Market. That’s the biggest drop since Nov. 27.

Similar-maturity Treasury yields slid from the highest in almost three months on Dec. 6 after the U.S. released the employment data. The Federal Reserve may give an indication on when it will taper its bond purchases at its Dec. 17-18 meeting.

“Taiwan’s been watching the response of U.S. Treasuries, which seem to indicate that the payrolls data wasn’t as bearish as expected,” said Vince Lin, a bond trader at Concord Securities Corp. in Taipei.

One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, decreased four basis points to 3.20 percent. The overnight interbank lending rate was steady at 0.387 percent, a weighted average compiled by the Taiwan Interbank Money Center showed.

To contact the reporter on this story: Justina Lee in Hong Kong at jlee1489@bloomberg.net

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

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