Taiwan Dollar Advances as U.S. Data Bolsters Growth Optimism
Taiwan’s dollar strengthened for a fifth day, the longest winning streak in a month, as data showing U.S. manufacturing unexpectedly accelerated boosted the outlook for exports.
Government bonds declined and stocks rose after the Institute for Supply Management’s U.S. factory index climbed to 55.3 last month from 53.5 in May, the Tempe, Arizona-based group said on July 1, compared with the median estimate in a Bloomberg survey for a drop to 52. A government report on July 7 may show Taiwan’s overseas shipments increased 20 percent in June from a year earlier after rising at the slowest pace in 19 months in May, according to a separate survey.
“The market is in risk-taking mode today as we see the U.S. dollar weakening on strong economic data,” said Henry Lin, a Taipei-based foreign-exchange trader at Taiwan Shin Kong Commercial Bank. “Taiwan’s exports will continue to drive the island’s economic growth.”
The Taiwan dollar appreciated 0.1 percent to NT$28.752 against its U.S. counterpart as of the 4 p.m. local close, according to Taipei Forex Inc. It touched NT$28.658 on July 1, the strongest level since June 3. The currency may rise to NT$28.500 this week, Lin said.
The yield on the government’s 2 percent bonds due July 2016, the most-traded government securities, rose one basis point to 1.16 percent, according to Gretai Securities Market.
The overnight money-market rate, which measures interbank funding availability, increased one basis point to 0.369 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.
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