Oct. 6 (Bloomberg) -- Taiwan’s dollar rose to its strongest level of the week after U.S. service-industries and payrolls data beat analyst estimates, damping concern exports will slump. Government bonds were little changed.
The island’s overseas sales probably increased 9.6 percent in September from a year earlier, following a 7.2 percent gain the previous month, based on the median estimate of economists surveyed by Bloomberg before a government report tomorrow. HSBC Holdings Plc slashed its 2012 economic growth forecast for Taiwan to 1.7 percent from 4.9 percent, according to a report received today, saying risks are building as Asia is “still tied to the global trade cycle.”
“Risk sentiment is better today,” said James Wang, a fixed-income trader at Yuanta Securities Co. in Taipei. “The market has more or less priced in expectations for slower local growth.”
Taiwan’s dollar appreciated 0.1 percent to NT$30.612 against its U.S. counterpart as of the 4 p.m. close, according to Taipei Forex Inc. It earlier climbed as much as 0.3 percent to NT$30.550. The currency dropped 4.9 percent in September, its worst performance since October 1997.
The yield on Taiwan’s 1.25 percent bonds due September 2021, the most-traded government securities, was little changed at 1.270 percent, prices from Gretai Securities Market show.
The central bank “doesn’t favor Taiwan dollar depreciation,” Governor Perng Fai-nan said in reply to questions from lawmakers in Taipei yesterday. The exchange rate is determined by market supply and demand, and the island is facing less “hot money” inflows, he said.
The overnight money-market rate, which measures interbank funding availability, was little changed at 0.395 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.
--Editors: Simon Harvey, James Regan
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