Taiwan Dollar Forwards Drop Most in 10 Months on Growth Concern
The jobless rate rose to 4.29 percent, the highest since November, the statistics bureau said today. Orders for overseas sales dropped 1.5 percent in August from a year earlier, a sixth month of decline, official data showed Sept. 20. The MSCI Asia Pacific Index of stocks fell on concern talks to resolve Europe’s debt crisis are deadlocked. The Taiwan dollar touched a four-month high on Sept. 17.
“The currency is far too strong for what the fundamentals suggest,” said Sacha Tihanyi, a Hong Kong-based senior currency strategist at Scotiabank. “Export orders continue to decline on a year-on-year basis, implying shipments will deteriorate.”
One-month non-deliverable forwards fell 0.6 percent to NT$29.469 against the greenback as of 4:26 p.m. local time, according to data compiled by Bloomberg. That was the biggest drop since Nov. 10, 2011 and the contracts are now almost in line with the spot rate. The Taiwan dollar weakened 0.1 percent to NT$29.479, according to Taipei Forex Inc. The currency reached NT$29.198 last week, the strongest level since May 3.
German Chancellor Angela Merkel and French President Francois Hollande underlined Franco-German disagreement over how to resolve the debt crisis over the weekend as they clashed on a timetable to introduce joint oversight of the region’s banks.
The island’s industrial production rose 1.89 percent last month from a year earlier, beating the median estimate of economists surveyed by Bloomberg for a 0.66 percent decline, an official report released today showed. Factory output fell 0.02 percent in July.
The yield on Taiwan’s 1.125 percent notes due September 2022 was 1.175 percent, compared with 1.179 percent on Sept. 21, according to Gretai Securities Market. That’s the lowest level since Sept. 10. The overnight money-market rate was little changed at 0.387 percent, a weighted average compiled by the Taiwan Interbank Money Center shows.
To contact the reporter on this story: Andrea Wong in Taipei at email@example.com