Taiwan Dollar Rises First Time in Four Days on Growth Optimism

Taiwan’s dollar gained for the first time in four days on signs the island’s economy is improving. Government bonds were steady.

Export orders, an indicator of shipments in the next one to three months, rose 18 percent in January from a year earlier, the most in more than two years, official data showed yesterday. The statistics bureau raised its economic-growth forecast for 2013 to 3.59 percent from 3.53 percent on Feb. 22. Taiwan sold 30-year bonds last week at a yield of 1.795 percent compared with 1.705 percent at the previous sale on Nov. 20.

“Because of the economic environment in Taiwan, expectations for GDP are high,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei. “Insurance companies require higher yields for long-term bonds. In the fourth quarter, the central bank may change its policy.”

The Taiwan dollar strengthened 0.1 percent to NT$29.705 against its U.S. counterpart, based on prices from Taipei Forex Inc. The central bank has sold the local currency near the close on most days in the past 11 months, according to traders who asked not to be identified.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, dropped five basis points to 5 percent.

Industrial production expanded 19.17 percent in January from a year earlier, after a revised 2.05 percent increase the previous month, a government report today showed. The data for January and February may be distorted by the Chinese New Year holidays, which Asian nations celebrated in January in 2012 and in February this year.

The yield on the 1.125 percent bonds due March 2023 was little changed at 1.212 percent, according to Gretai Securities Market, the most since Oct. 3. The overnight interbank lending rate was steady at 0.389 percent, according to Taiwan Interbank Money Center.

Before it's here, it's on the Bloomberg Terminal.