Taiwan Dollar Rises as Exporters Repatriate Funds; Bonds Steady

Taiwan’s dollar rose on speculation exporters are taking advantage of a four-day loss to convert overseas earnings at a more favorable exchange rate. Government bonds were little changed.

“It’s mainly exporters selling the greenback,” said Tarsicio Tong, a foreign-exchange trader at Union Bank of Taiwan in Taipei. “Concerns over Taiwan growth will continue to add depreciation pressure on the currency.”

The Taiwan dollar earlier touched its weakest level in more than a month as stock indexes across Asia dropped today. The island’s exports contracted for a fourth month in June, adding to speculation Europe’s lingering debt crisis is crimping demand. Global funds sold $346 million more Taiwanese shares than they bought in the last two days, according to exchange data.

The currency climbed 0.04 percent to NT$29.974 against its U.S. counterpart, according to Taipei Forex Inc. It reached NT$30.030, the weakest level since June 5. One-month implied volatility, a measure of exchange-rate swings used to price options, fell 13 basis points to 3.67 percent.

Overseas shipments fell 3.2 percent in June from a year earlier, after declining 6.3 percent in May, official data showed on July 9. Exports from China rose 11.3 percent last month, slowing from 15.3 percent in May, according to a government report yesterday.

The yield on the 1.25 percent Taiwanese government bonds due March 2022 was at 1.185 percent, according to Gretai Securities Market. That’s the lowest level for the benchmark 10-year yield since June 12.

The overnight interbank lending rate was little changed at 0.509 percent, according to a weighted average compiled by the Taiwan Interbank Money Centre.

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