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Taiwan’s dollar fell for a third day as investors favored safer assets after data showed the island’s economy is slowing. Government bonds were little changed.
Taiwan’s export orders slumped for a third month in May, and the jobless rate climbed, according to government reports last week. The MSCI Asia-Pacific Index of shares declined for a third day before Italy and Spain hold bond auctions tomorrow and European leaders meet this week to discuss strategies to contain the region’s financial crisis. The yield on Taiwan’s benchmark 10-year bonds has dropped seven basis points, or 0.07 percentage point, in the past two months.
“Taiwan’s economy is very much export-oriented, and we haven’t seen any good economic data out recently,” said Samson Tu, a Taipei-based fund manager at Uni-President Assets Management Corp., who helps manage $1.6 billion of fixed-income assets. “The room for yields to go down further is a bit limited” after the recent rally, he said.
Taiwan’s dollar weakened 0.1 percent to NT$29.995 against its U.S. counterpart, according to Taipei Forex Inc. One-month implied volatility, a measure of exchange-rate swings used to price options, fell six basis points to 4.55 percent.
The yield on the 1.25 percent securities maturing in March 2022 was little changed at 1.204 percent, according to Gretai Securities Market. The overnight interbank lending rate slipped one basis point to 0.507 percent, according to a weighted average compiled by the Taiwan Interbank Money Centre.
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