Taiwan Dollar Posts Weekly Gain as Exports Add to Growth Signs

Taiwan’s dollar posted a second weekly gain after export figures that beat estimates added to signs economic growth is gathering momentum.

Overseas shipments climbed 6.2 percent in April from a year earlier, compared with a 2 percent increase in March, official data showed May 7. That was more than the median estimate in a Bloomberg News survey for a 5.5 percent gain. The island’s economy grew at the fastest pace in the first quarter since the last three months of 2012. The currency was also supported as the greenback headed for a second weekly decline.

“The U.S. dollar has been weaker lately,” said Andrew Tsai, a Taipei-based economist at KGI Securities. “Taiwan’s economic data such as exports have also been better than expected, so there may be more fund inflows.”

The island’s dollar rose 0.1 percent this week to NT$30.175 against its U.S. counterpart and was little changed today, according to prices from Taipei Forex Inc. The currency slipped 0.2 percent in the last six minutes of trading amid suspected central bank intervention.

One-month non-deliverable forwards strengthened 0.3 percent from May 2 to NT$30.078, data compiled by Bloomberg show. The contracts fell 0.2 percent today. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major currencies, dropped 0.3 percent this week, after falling by the same magnitude in the previous five days.

One-month implied volatility in the Taiwan dollar, a gauge of expected moves in the exchange rate used to price options, slid 33 basis points this week and nine basis points today to 3.11 percent.

Overseas investors sold $345 million more Taiwanese stocks than they bought this week, following 12 consecutive weeks of net purchases, exchange data show.

Bond Market

The government sold NT$30 billion ($995 million) of 10-year bonds at a yield of 1.532 percent today, lower than the 1.545 percent median estimate in a Bloomberg News survey of 11 fixed-income traders.

In secondary market trading, the yield on the 1.5 percent sovereign notes due March 2024 was little changed this week and dropped one basis point, or 0.01 percentage point, today to 1.532 percent, data from GreTai Securities Market shows.

The overnight interbank lending rate was steady this week and today at 0.385 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

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