Bloomberg News

Taiwan’s Dollar Climbs to an Eight-Month High; Bonds Steady

May 01, 2012

Taiwan’s dollar advanced to the strongest level in almost eight months after global funds added to holdings of local stocks on optimism exports will increase as the U.S. economy recovers. Government bonds were steady.

International investors bought $119 million more Taiwanese shares than they sold on April 30, taking net purchases for the year to $3.9 billion, according to exchange data. The U.S. Institute for Supply Management’s factory index climbed to 54.8 in April, exceeding the most optimistic forecast in a Bloomberg News survey. The currency gained for a fifth day after official data showed last week that the local economy expanded for a 10th successive quarter in the three months through March.

“Funds are coming into Taiwan again,” said Eric Hsing, a fixed-income trader at First Securities Inc. in Taipei. “Although Taiwan’s economy is still recovering, it’s still in pretty good shape compared to the developed nations.”

Taiwan’s dollar gained 0.3 percent to NT$29.136 against its U.S. counterpart as of 9:28 a.m. local time, according to Taipei Forex Inc. It touched NT$29.08, the strongest level since Sept. 8. One-month implied volatility, a measure of exchange-rate swings traders use to price options, rose eight basis points, or 0.08 percentage point, to 4.08 percent.

The yield on the government’s 1 percent bonds due January 2017 was little changed at 0.996 percent, according to Gretai Securities Market.

The overnight interbank lending rate slipped one basis point to 0.499 percent, according to a weighted average compiled by the Taiwan Interbank Money Center. It reached 0.508 percent on April 30, the highest level since 2008.

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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