Taiwan’s dollar gained on speculation China will take further steps to combat an economic slowdown. Government bonds were little changed.
Global funds bought $586 million more Taiwanese shares than they sold last week, boosting net purchases for the month to $3.11 billion, exchange data show. Chinese Premier Wen Jiabao urged extra measures to help meet economic targets as he toured Guangdong, the nation’s biggest exporting province, the official Xinhua News Agency said Aug. 25. China, the world’s second- biggest economy, is the island’s biggest trading partner.
“China wants to stabilize exports and keep its economy going,” said Tarsicio Tong, a foreign-exchange trader at Union Bank of Taiwan. (2838) “It’s mainly exporters selling the greenback.”
Taiwan’s dollar advanced 0.1 percent to NT$29.98 against its U.S. counterpart, according to Taipei Forex Inc. One-month implied volatility, a measure of exchange-rate swings used to price options, was little changed at 3.3 percent.
U.S. Federal Reserve Chairman Ben S. Bernanke said policy makers can take additional steps to boost the economy before they meet on Aug. 30 in Jackson Hole, Wyoming. The central bank has already conducted two rounds of bond purchases to pump cash into the banking system, a policy known as quantitative easing.
The yield on Taiwan’s 1.25 percent notes due March 2022 was little changed at 1.183 percent, according to Gretai Securities Market.
The overnight money-market rate slipped one basis point to 0.386 percent, according to a weighted average compiled by the Taiwan Interbank Money Centre. A basis point is 0.01 percentage point.
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