Nov. 28 (Bloomberg) -- Taiwan’s dollar snapped a six-day decline as speculation the International Monetary Fund will help Italy boosted optimism Europe will be able to contain its debt crisis, spurring demand for emerging-market assets.
The local dollar rebounded from a six-week low and the Taiex index of shares rallied by the most in two weeks after Italian newspaper La Stampa reported the loan plan. The currency pared earlier gains as the IMF said in an e-mailed statement it is not in talks with Italy about a loan program. Global funds bought $39 million more of the island’s stocks than they bought today, ending an eight consecutive days of net sales, according to exchange data.
“It’s mostly foreign funds and exporters buying the Taiwan dollar today on the good news from Europe,” said Henry Lin, a Taipei-based foreign-exchange trader at Taiwan Shin Kong Commercial Bank. “But bad news should continue to dominate the market, leading the Taiwan dollar on a weaker trend.”
The Taiwan dollar strengthened to NT$30.452 against its U.S. counterpart from NT$30.460 last week, according to Taipei Forex Inc. The currency touched NT$30.505 on Nov. 25, the weakest level since Oct. 12. Lin forecast it will weaken to NT$31 by the end of the year. The benchmark share index rose 1.7 percent.
Government bonds were little changed. The yield on the 1.25 percent bonds due September 2021, the most-traded securities, was 1.326 percent, prices from Gretai Securities Market show.
The overnight money-market rate, which measures interbank funding availability, was steady at 0.396 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 email@example.com
To contact the editor responsible for this story: Sandy Hendry at firstname.lastname@example.org