Taiwan Dollar Gains for Fifth Week as Fed Seen Stalling on Data

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Taiwan’s dollar posted a fifth weekly gain, the longest winning streak since 2013, as investors pushed back bets for higher U.S. interest rates following data that cast doubts on the strength of a recovery.

The island’s currency has climbed 2 percent against the dollar this year in Asia’s best performance, as U.S. reports ranging from jobs to manufacturing and consumer spending disappointed. Only 12 percent of economists in a Bloomberg survey see the Federal Reserve tightening policy in June, down from 45 percent in a March poll.

“People have some concerns over the U.S. recovery in the second quarter,” said Andrew Tsai, an economist at KGI Securities Co. in Taipei. “But whether it’s inflation expectations or domestic demand, we should see some improvement, so we expect the U.S. dollar to rise again, which means there’s pressure for a correction in Taiwan’s dollar.”

The island’s currency strengthened 0.3 percent from April 10 and on Friday to NT$31.162 against the greenback, Taipei Forex Inc. prices show. A gauge of the dollar declined 1.8 percent this week. Five-year government bonds were little changed for the week, with the yield at 0.999 percent, according to Taipei Exchange prices.

A rebound in the yen also contributed to the Taiwan dollar’s rise this week, Tsai added. Japan’s currency jumped 1.2 percent to 118.82 versus its U.S. counterpart late in Asia trading. The Taiwan and Japanese currencies often move in tandem as their companies compete in similar export markets.

One-month non-deliverable forwards on Taiwan’s dollar jumped 0.9 percent this week and 0.3 percent on Friday to NT$30.967, according to data compiled by Bloomberg.

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