Taiwan Dollar Rises to Seven-Week High as Exporters Sell Dollars

Taiwan’s dollar touched a seven-week high on speculation exporters repatriated sales proceeds toward the month-end after overseas investors bought local stocks.

Global funds purchased $468 million more equities than they sold this week, taking net inflows in May to $1.3 billion, exchange data show. The Taiex index of shares closed at a three-year high yesterday, before retreating 0.1 percent today.

Taiwan’s dollar strengthened 0.1 percent to NT$30.128 against its U.S. counterpart, according to prices from Taipei Forex Inc. The currency earlier climbed as much as 0.4 percent to NT$30.030, the strongest level since April 11. The local dollar has advanced 0.4 percent in May, poised for a second monthly gain.

“The Taiwan dollar is usually stronger near the month-end as exporters sell foreign currencies,” said Forest Chen, a Taipei-based economist at Ta Chong Bank Ltd. It may rise beyond the 30 level in June as exporters repatriate more income before the half-year mark and on inflows to equities, he said.

One-month non-deliverable forwards rose 0.5 percent, the biggest gain since April 8, to NT$29.968 against the greenback, according to data compiled by Bloomberg. One-month implied volatility, a gauge of expected moves in the exchange rate used to price options, fell three basis points, or 0.03 percentage point, to 3.01 percent.

The yield on the 1.5 percent government bonds due March 2024 fell two basis points to 1.49 percent, according to prices from GreTai Securities Market.

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