Bloomberg News

Taiwan Dollar Snaps Three-Day Drop as Exporters Repatriate Funds

June 26, 2012

Taiwan’s dollar ended a three-day losing streak on speculation exporters are repatriating income before the end of the month. Government bonds were steady.

The currency closed at NT$29.990 against its U.S. counterpart, little changed from NT$29.995 yesterday, according to Taipei Forex Inc. It earlier weakened to NT$30.010, near a five-month low of NT$30.070 reached on June 5.

“Exporters are very interested in selling the greenback when the exchange rate is above NT$30,” said Tarsicio Tong, a currency trader at Union Bank of Taiwan (2838) in Taipei. “In the next three months, the currency should continue to weaken due to the worsening economic performance.”

Global funds sold $143 million more Taiwanese shares than they bought today, building on net sales of $840 million this month through yesterday, exchange data show. The island’s export orders slumped for a third month in May and the jobless rate climbed, government reports showed last week.

The currency has dropped 1.5 percent this quarter, paring its 2012 gain to 1 percent. One-month implied volatility, a measure of exchange-rate swings used to price options, was little changed today at 4.55 percent.

The yield on Taiwan’s 1.25 percent bonds due March 2022 was little changed at 1.20 percent, according to Gretai Securities Market. The rate on the benchmark 10-year bonds reached 1.205 percent on June 22, the highest level in more than three weeks.

The overnight interbank lending rate was steady at 0.507 percent, according to a weighted average compiled by the Taiwan Interbank Money Centre.

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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