The New Taiwan dollar yesterday gained against the greenback, building on six weekly advances, after larger-than-expected job cuts in the US spurred speculation the Federal Reserve would expand the supply of its currency.
The NT dollar reached a two-year high as foreigners bought US$193 million more local shares than they sold yesterday, boosting net purchases for this year to US$3.8 billion, exchange data showed.
US data on Friday showed 95,000 jobs were lost in September, more than the drop of 5,000 forecast by economists in a Bloomberg survey.
“The US may print more money to save its economy and that’s weighing on the greenback and supporting Asian currencies,” said Eric Hsing, a debt trader at First Securities Inc (第一金證券) in Taipei. “Strong economic growth in Taiwan and Asia are also attracting funds.”
The NT dollar rose 0.3 percent to close at NT$30.998 against its US counterpart, Taipei Forex Inc data showed. The currency reached NT$30.645 on Thursday, the strongest level since August 2008.
The currency trimmed gains during the final minutes of trading on suspected intervention by the central bank, said two traders familiar with the matter, who declined to be identified.
It was trading 1 percent stronger at NT$30.791 five minutes before the market’s close.
Taiwan’s monetary authority started auditing local banks’ currency-forwards operations to prevent the use of such contracts in foreign--exchange speculation, the Chinese-language Commercial Times reported on Saturday, citing Department of Financial Inspection Deputy Director-General Chiu Ming-chuan (邱明全).
Minister of Finance Lee Sush-der (李述德) said the government has no plans to impose a new tax on short-term capital flows, the Chinese-language Economic Daily News reported the same day.
Asia’s developing economies will expand 9.4 percent this year, outpacing growth of 2.7 percent in advanced countries, the IMF forecast on Wednesday last week. The Washington-based lender forecast growth of 9.3 percent for Taiwan.
The nation’s benchmark five-year bonds were little changed yesterday, with the yield on the 2 percent note due in July 2015 at 0.83 percent, GRETAI Securities Market data showed.
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