Taiwan Dollar Set for Second Weekly Gain After Exports Increase

Taiwan’s dollar headed for its second weekly gain on speculation export data that beat estimates will lure more inflows.

The island’s overseas shipments climbed 6.2 percent in April from a year earlier, compared with a 2 percent increase in March and the median estimate in a Bloomberg survey for a 5.5 percent gain, official data showed May 7. The Bloomberg Dollar Spot Index, which tracks the greenback against ten leading currencies, has fallen 0.4 percent this month following an 0.8 percent drop in April.

“The U.S. dollar has been weaker lately,” said Andrew Tsai, a Taipei-based economist at KGI Securities. “Taiwan’s economic data such as exports has also been better than expected, so there may be more fund inflows.”

The island’s dollar rose 0.3 percent this week and 0.2 percent today to NT$30.110 against its U.S. counterpart as of 9:37 a.m. local time, according to prices from Taipei Forex Inc. That pared its loss this year to 0.5 percent. One-month non-deliverable forwards strengthened 0.4 percent since May 2 to NT$30.053, data compiled by Bloomberg show. The contracts fell 0.1 percent today.

Overseas investors have sold $158 million more Taiwanese stocks than they bought this week, following 12 consecutive weeks of net purchases, exchange data show. There have been $6.2 billion of inflows into shares this year.

The yield on the 1 percent sovereign bonds due February 2019 was little changed this week and today at 1.031 percent, GreTai Securities Market prices show. The government will sell NT$30 billion ($997 million) of 10-year notes at 1.545 percent today, according to the median estimate in a Bloomberg News survey of 11 fixed-income traders.

One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, slid 29 basis points, or 0.29 percentage point, this week and four basis points today to 3.16 percent. The overnight interbank lending rate was steady this week and today at 0.387 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

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

To contact the editors responsible for this story: Amit Prakash at aprakash1@bloomberg.net Andrew Janes, Anil Varma

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