Taiwan Dollar Advances Most Since September on Recovery Optimism

Taiwan’s dollar rose the most since September and bonds dropped after data from the U.S. and China signaled a global economic recovery is gathering pace, boosting demand for riskier assets.

The currency snapped a three-day loss as exchange figures showed global funds bought $273 million more Taiwanese stocks than they sold today. U.S. payrolls rose by 157,000 in January, according to a Feb. 1 official report. China’s services industries grew the most since August last month, according to government data yesterday. Taiwan will appoint central bank Governor Perng Fai-nan to a fourth five-year term, Fan-Chiang Tai-chi, a presidential office spokesman, said last week.

“Risk-taking sentiment is prevailing as the U.S. economy continues to improve,” said Sam Chang, a fixed-income trader at Yuanta Securities Co. in Taipei. “Perng will probably continue his policy of stable interest rates and exchange rates in his new term.”

The Taiwan dollar rose 0.3 percent to NT$29.58 against its U.S. counterpart in Taipei, the biggest gain since Sept. 14, according to Taipei Forex Inc. It reached NT$29.70 on Jan. 29, the weakest level in more than four months.

The central bank has sold the local currency near the close on most days in the past 10 months, according to traders who asked not to be identified. Under Perng’s 15 years at the helm, the Taiwan dollar gained about 11 percent against its U.S. counterpart, compared with a 22 percent appreciation in the Bloomberg-JPMorgan Asia Dollar Index, according to data compiled by Bloomberg.

China Data

China’s non-manufacturing Purchasing Managers’ Index rose to 56.2 in January from 56.1 in December, the Beijing-based National Bureau of Statistics and China Federation of Logistics & Purchasing said in a statement yesterday. A reading above 50 indicates expansion.

One-month implied volatility in the Taiwan dollar, a gauge of expected swings used to price options, dropped 15 basis points, or 0.15 percentage point, to 4.4 percent, according to data compiled by Bloomberg.

The yield on the 0.875 percent bonds due January 2018 rose one basis point to 0.91 percent, the highest level in four weeks, according to Gretai Securities Market.

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