Taiwan Dollar Gains Most in 2 Weeks as Exporters Buy; Bonds Fall

Taiwan’s dollar gained the most in almost two weeks on speculation exporters took advantage of a relatively favorable exchange rate to repatriate income. Government bonds fell for a third day.

Companies converted overseas earnings after the local dollar touched this month’s lowest level earlier amid concern Europe’s debt crisis will hurt developing economies, according to Taiwan Shin Kong Commercial Bank. Asian stock indexes rose today after Federal Reserve Bank of Richmond President Jeffrey Lacker predicted the U.S. economy will grow at least 2 percent in 2012, brightening the outlook for the region’s exports.

“The Taiwan dollar rebounded a bit on some selling of the greenback by exporters,” said Henry Lin, a Taipei-based foreign-exchange trader at Taiwan Shin Kong Commercial. “It should continue its weaker trend. Demand for the U.S. dollar is high when the economic outlook isn’t good.”

The Taiwan dollar gained 0.2 percent to NT$30.353 against its U.S. counterpart, according to Taipei Forex Inc. It touched NT$30.410 earlier, the weakest level since Nov. 30. Lin predicts the currency will decline to NT$30.500 by Dec. 31.

The yield on Taiwan’s 1.25 percent bonds due September 2021, the most-traded government securities, increased two basis points to 1.269 percent, prices from Gretai Securities Market show. Benchmark 10-year rates have dropped 28 basis points, or 0.28 percentage point, in 2011.

The overnight money-market rate, which measures interbank funding availability, was unchanged at 0.399 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.