The New Taiwan dollar sank to a three-week low as a deepening global economic slump encouraged investors to favor safer bets over emerging-market assets.
It weakened against the US dollar for a fourth day after overseas investors sold more of the nation’s shares than they bought in seven of the past eight days. Government estimates released after the close of trading showed that the economy is expected to shrink for a second quarter in the three months through next month, joining the US, Europe, Japan, Hong Kong and Singapore in recession.
“The decoupling story seems to be a no-show in the mess,” said Mitul Kotecha, global head of foreign exchange strategy at Calyon, a unit of France’s Credit Agricole SA.
“It’s less the credit concerns here and more economic concerns. There’s more downside for Asian currencies,” Kotecha said.
The NT dollar declined 0.4 percent to close at NT$33.405 after falling earlier 0.5 percent to NT$33.439, its weakest level since Oct. 29.
Eight of Asia’s 10 most-active currencies excluding the yen weakened yesterday and equities tumbled across the region.
Taiwan’s 10-year government bonds rose by the most in eight days, driving yields to a five-year low, as investors favored the safest assets.