Taiwan Dollar Rallies for Third Straight Week on Dovish Fed Bets

Taiwan’s dollar completed its third weekly gain as disappointing U.S. data pushed down the greenback and China’s central bank strengthened its yuan fixing.

The island’s currency closed 0.3 percent stronger at NT$33.52 against its U.S. counterpart, taking its advance since Jan. 30 to 0.4 percent, according to prices from Taipei Forex Inc.

A gauge of the U.S. dollar strength fell this week as signs of a U.S. economic slowdown spurred speculation the Federal Reserve will hold off from raising interest rages again in March. The People’s Bank of China strengthened the yuan’s reference rate by 0.3 percent this week, while figures released Friday showed Taiwanese consumer-price gains in January beat analysts’ forecasts.

"Expectations for a further Fed rate hike are fading,” said Rick Lo, a senior economist at Fubon Financial Holding Co. in Taipei. “A stronger yuan fixing also reduces depreciation pressure on the Taiwan dollar and other Asian currencies.”

Consumer prices rose 0.81 percent last month from a year earlier. That compared with an 0.14 percent increase in December and the 0.75 percent median estimate in a Bloomberg survey.

The island’s bond rose, pushing the yield on the 10-year notes down three basis points to 0.885 percent, Taipei Exchange prices show.

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