Taiwan Dollar Slumps to Four-Year Low on Fed Interest-Rate BetsJustina Lee
Taiwan’s dollar slumped to a four-year low on concern foreign investors may sell local assets as the U.S. Federal Reserve moves closer to raising interest rates.
Global funds sold $1.1 billion more Taiwanese shares than they bought last week, the biggest outflow since September, exchange data show. The Bloomberg Dollar Spot Index climbed 0.9 percent last week to the highest level since 2009 as the Fed indicated it is on track to raise borrowing costs next year, a move that will reduce the appeal of emerging-market assets.
“There is some money leaving Taiwan,” said Tarsicio Tong, a currency trader at Union Bank of Taiwan in Taipei. “Asian emerging markets are facing pressure of outflows now as the U.S. is expected to raise rates. The greenback is very strong.”
Taiwan’s dollar weakened 0.4 percent to NT$31.586 against its U.S. counterpart, the lowest level since September 2010, prices from Taipei Forex Inc. showed. One-month non-deliverable forwards fell 0.2 percent to NT$31.569, data complied by Bloomberg show.
In the bond market, the yield on the 1.625 percent government notes due September 2024 dropped two basis points, or 0.02 percentage point, to 1.595 percent, GreTai Securities Market prices show.