Bloomberg News

Taiwan Dollar Strengthens Most in Two Weeks on Inflows Optimism

March 27, 2012

Taiwan’s dollar rose the most in more than two weeks on optimism investors will favor emerging- market assets after the Federal Reserve said accommodative monetary policy is still needed to sustain U.S. economic growth.

Global funds bought $857 million more Taiwanese shares than they sold this month, boosting net purchases for the quarter to $4.8 billion, according to exchange data. Stock indexes across Asia advanced today after Fed Chairman Ben S. Bernanke said yesterday in a speech that while he’s encouraged by the unemployment rate’s decline, continued accommodative monetary policy will be needed to make further progress.

“The greenback has gone weaker due to Bernanke’s comments,” said Tarsicio Tong, a currency trader at Union Bank of Taiwan (2838) in Taipei. “There are also exporters selling the U.S. dollar.”

Taiwan’s dollar gained 0.13 percent to NT$29.584 against its U.S. counterpart, the biggest appreciation since March 8, according to Taipei Forex Inc. The currency has appreciated 2.4 percent this quarter.

One-month implied volatility, a measure of exchange-rate swings that traders use to price options, was little changed at 4.3 percent.

Government bonds were steady. The yield on the 1.25 percent notes due March 2022 was at 1.276 percent from 1.280 percent yesterday, according to Gretai Securities Market. The overnight money-market rate was little changed at 0.403 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

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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