Bloomberg News

Taiwan’s Dollar Has Biggest Weekly Loss This Year on Outflows

May 11, 2012

Taiwan’s dollar had its biggest weekly loss this year as investors sold the nation’s assets amid the political impasse in Greece. Bonds were little changed.

Foreign funds sold $1.5 billion more Taiwan stocks than they bought this week, exchange data showed. Exports dropped by the most in three months in April, an official report showed on May 7. Greece’s political leaders are struggling to form a coalition government following a May 6 election, reigniting concern about the country’s willingness to comply with the terms of its bailouts.

“The overall risk sentiment is quite negative this week with the Greek elections inconclusive,” said Goh Puay Yeong, a Singapore-based foreign-exchange strategist at Credit Suisse Group AG. “The Taiwanese trade numbers were pretty soft. All this added to weakness in the Taiwan dollar.”

Taiwan’s dollar declined 0.4 percent this week to NT$29.410 against its U.S. counterpart, according to Taipei Forex Inc. The currency fell 0.1 percent from yesterday. One-month implied volatility, a measure of price swings that options traders use, was unchanged this week at 4.30 percent. It fell 17 basis points, or 0.17 percentage point, today.

Overseas shipments fell 6.4 percent in April from a year earlier, compared with a 3.2 percent decline in March, as Europe’s debt crisis and slower Chinese growth crimped demand for its electronic products.

The yield on the island’s 1 percent bonds due January 2017 was little changed this week and dropped one basis point today to 0.976 percent, according to Gretai Securities Market. The overnight money-market was steady this week and today at 0.51 percent, according to a weighted average compiled by the Taiwan Interbank Money Center.

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net

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


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