Bloomberg News

Taiwan Dollar Rises Most Since April on Europe Debt Optimism

October 11, 2011

Oct. 11 (Bloomberg) -- Taiwan’s dollar rose the most since April and government bonds fell, pushing the five-year yield to a two-month high, as a pledge by European leaders to tackle their debt crisis helped shore up demand for riskier assets.

Benchmark stock indexes rallied across Asia today after German Chancellor Angela Merkel and French President Nicholas Sarkozy pledged at the weekend to deliver a plan to recapitalize European banks and address Greece’s sovereign-debt crisis by Nov. 3. The island’s exports rose 9.9 percent in September from a year earlier, following a 7.2 percent increase in August, the government reported on Oct. 7. Local financial markets were closed yesterday for the National Day holiday.

“Sentiment was hugely boosted today following the consensus reached by German and French leaders,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei. “It seems investors are slightly more optimistic about the global economy.”

Taiwan’s dollar appreciated 0.5 percent to close at NT$30.348 against its U.S. counterpart, according to Taipei Forex Inc. It touched NT$30.29, the strongest level since Sept. 22.

The yield on the government’s 2 percent bonds due July 2016 rose two basis points, or 0.02 percentage point, to 1.05 percent, prices from Gretai Securities Market show. That’s the highest rate for benchmark five-year debt since Aug. 17.

The overnight money-market rate, which measures interbank funding availability, was little changed at 0.394 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

--Editors: James Regan, Sandy Hendry

To contact the reporter on this story: Andrea Wong in Taipei at awong268@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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