The New Taiwan dollar completed its fifth weekly gain, the longest winning streak in seven months, as monetary easing in the US and Japan spurred demand for emerging-market assets.
The local currency surged as foreigners bought US$800 million more in Taiwanese shares than they sold this week, exchange data show. Central bank Governor Perng Fai-nan (彭淮南) said he would maintain relative stability in the local currency and step into the market in the event of abnormal fluctuations.
The US Federal Reserve announced last week open-ended buying of US$40 billion of mortgage debt per month in a third round of quantitative easing (QE3). The Bank of Japan unexpectedly expanded its asset-purchase fund this week.
“Some exporters are selling the greenback now as they’re worried the gains may extend due to QE3,” said Tarsicio Tong (湯健揚), a foreign-exchange trader at Union Bank of Taiwan (聯邦銀行) in Taipei. “But Perng has made it quite clear that he wants the currency to be stable. I think it might go back to pre-QE3 levels in a month.”
The NT dollar rose 0.1 percent this week and 0.2 percent on Friday to NT$29.45 against its US counterpart, according to Taipei Forex Inc. The currency has gained 1.8 percent this month.
Meanwhile, the Philippine peso and Malaysia’s ringgit led declines in Asian currencies this week after data from the US, Europe and China reinforced concern the global economic slowdown was deepening.
More Americans than forecast filed claims for unemployment benefits, according to data released on Thursday, while a Chinese manufacturing survey signaled an 11th month of contraction. A gauge of euro-area services and production fell to a 39-month low, another report showed.
Malaysia’s ringgit declined 0.6 percent this week to 3.0505 per US dollar, according to data compiled by Bloomberg.
The Philippine peso also lost 0.6 percent to 41.665, while Indonesia’s rupiah slid 0.5 percent to 9,551. Thailand’s baht fell 0.2 percent to 30.82.
The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-active currencies outside of Japan, was steady at 116.98 compared with 116.93 at the end of last week, while the MSCI Asia Pacific Index of shares lost 0.1 percent.
India’s rupee surged to the highest level in more than four months as the government reduced a tax on local companies’ overseas borrowings, stepping up efforts to revive investment inflows.
Elsewhere in Asia, South Korea’s won declined 0.2 percent this week to 1,119.23 per US dollar, China’s yuan appreciated 0.15 percent to 6.3053, while Vietnam’s dong traded at 20,870 compared with 20,850 a week ago.