Taiwan’s dollar touched a two-week low on concern the island’s economic growth is losing momentum. Government bonds were steady before an auction tomorrow.
The currency retreated for a fourth day as official data showed export orders slumped 4.4 percent in July, more than the 2.98 percent decline forecast in a Bloomberg survey. The statistics bureau cut its 2012 economic growth forecast to 1.66 percent from 2.08 percent on Aug. 17 after a government report showed gross domestic product fell 0.18 percent in the second quarter from a year earlier, following a 0.16 percent decrease in the previous three months.
“There aren’t any fundamentals supporting an appreciation of the Taiwan dollar,” said Tarsicio Tong, a foreign-exchange trader at Union Bank of Taiwan. “It should continue to weaken.”
Taiwan’s dollar closed at NT$30.030 against its U.S. counterpart, compared with NT$30.025 on Aug. 17, according to Taipei Forex Inc. That’s the weakest level since Aug. 3. The currency will reach NT$32 within a month, Tong predicted. One- month implied volatility, a measure of exchange-rate swings used to price options, was unchanged at 3.40 percent.
Government bonds were steady before the Ministry of Finance sells NT$30 billion ($999 million) of 30-year debt tomorrow. The yield on Taiwan’s 1.25 percent notes due March 2022 was 1.181 percent, according to Gretai Securities Market. The overnight money-market rate was little changed at 0.386 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 email@example.com
To contact the editor responsible for this story: James Regan at firstname.lastname@example.org