Tue, Jul 07, 2009 - Page 12 News List

Local currency falls on export outlook for last month

BLOOMBERG

The New Taiwan dollar fell on concern exports dropped for a 10th month as overseas demand slumped.

A government report today is forecast to show overseas sales slipped 31 percent from a year earlier last month, based on the median estimate of economists surveyed by Bloomberg News. The Semiconductor Equipment Association of Japan predicts sales of equipment used to manufacture chips and flat-panel displays, one of Taiwan’s biggest industries, will drop twice as much as expected this year.

“The pickup of the economy is still fairly sluggish and things have got to recover more,” said Irene Cheung, director of local markets trading at ABN Amro NV in Singapore. “Until we see the export sector showing better data then we won’t see more positives for the Taiwan Dollar.”

The NT dollar fell 0.3 percent to NT$32.988 versus the US currency at the 4pm close, from NT$32.890 at the end of last week, Taipei Forex Inc said. Turnover was at US$912 million.

The currency will appreciate to NT$32.20 by the end of the year, the median estimate of analysts surveyed by Bloomberg showed.

The NT dollar has strengthened 7 percent since reaching an eight-year low in March as improved manufacturing figures for China and the US, the nation’s two biggest export markets, fanned speculation a global recession was easing.

The Semiconductor Equipment Association of Japan said on July 5 that sales of equipment used to make chips and flat-panel displays would drop by 49 percent, twice as much as originally forecast, this fiscal year as the global recession prompts chipmakers to delay spending.

Taiwan’s 10-year government bonds were little changed.

The yield on the 1.375 percent note maturing March 2019 was at 1.63 percent as of 1:30pm in Taipei, said Gretai Securities Market, Taiwan’s biggest exchange for bonds.

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