Taiwan Dollar, Bonds Decline Before Obama Unveils Stimulus Plan
Taiwan’s dollar weakened for a fifth day, its longest losing streak since February, before U.S. President Barack Obama unveils plans to shore up a recovery in the world’s biggest economy. Government bonds declined.
Obama will propose injecting more than $300 billion into the economy next year, mostly through tax cuts, infrastructure spending and direct aid to state and local governments. Taiwan’s currency sank to its weakest level in more than four months as exchange data showed global investors sold $85 million more of the island’s stocks than they bought today.
“Concern about the global economy and Taiwan’s growth being dragged down is still the main theme,” said Henry Lin, a Taipei-based foreign-exchange trader at Taiwan Shin Kong Commercial Bank. “Everyone’s hoping Obama will deliver some good measures to save the U.S. economy.”
Taiwan’s dollar fell 0.1 percent to NT$29.15 versus its U.S. counterpart as of the 4 p.m. local close, according to Taipei Forex Inc. That’s the weakest level since April 19. Lin forecasts the local dollar will weaken to NT$29.30 by the end of the month.
The yield on the 2 percent bonds due July 2016, the most- traded government securities, gained 0.6 basis point to 0.96 percent, prices from Gretai Securities Market show.
The overnight money-market rate, which measures interbank funding availability, was steady at 0.396 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.
Taiwan’s central bank last boosted its benchmark rate on June 30 by 12.5 basis points to 1.875 percent. The policy board is due to meet again on Sept. 29.
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