The New Taiwan dollar completed its fourth straight weekly advance on signs the economy is improving and speculation policymakers will raise borrowing costs this week.
Global funds bought US$389 million more Taiwanese shares than they sold this week, exchange data showed. Government reports this week showed a pickup in export orders and industrial output for last month, as well as a drop in the jobless rate. The central bank will boost its benchmark interest rate by 12.5 basis points to 1.50 percent on Thursday, according to economists in a Bloomberg survey.
“Data released this week show Taiwan is enjoying strong growth and this performance will likely continue,” said Tarsicio Tong (湯健揚), a currency trader at Union Bank of Taiwan (聯邦銀行) in Taipei. “The central bank will probably raise rates based on economic growth.”
The NT dollar rose 0.4 percent this week to close at NT$31.62 against its US counterpart, according to Taipei Forex Inc. It weakened 0.1 percent from Thursday and was trading 0.4 percent stronger one minute before trading ended.
Other Asian currencies also climbed this week, led by India’s rupee, as global funds pumped more money into the region’s developing nations to profit from the world’s fastest economic growth.
China’s yuan climbed to its strongest level since 1993 as US President Barack Obama criticized China for using an undervalued currency to gain an unfair trade advantage. The yuan appreciated 0.2 percent to 6.7079 per US dollar in the first two days of the week, before markets closed for a holiday in Shanghai.
The rupee rose 0.4 percent this week to Rs45.66 per US dollar, buoyed by the government’s decision on Thursday to increase the cap on foreign bond holdings.
Malaysia’s ringgit, Asia’s best-performing currency this year, rose 0.3 percent this week to RM3.0930 per US dollar and touched a 13-year high of RM3.0873 on Thursday.
Elsewhere, South Korea’s won climbed 0.5 percent this week to 1,155.15 against the US dollar, Indonesia’s rupiah strengthened 0.2 percent to Rp8,958 and the Singapore dollar gained 0.7 percent to S$1.3250. The Thai baht was little changed from a week ago at 30.69.
The US dollar fell against all of its major counterparts after the Federal Reserve announced its willingness to further ease monetary policy, damping demand for US assets.
The greenback weakened 3.4 percent to US$1.3492 per euro. On on Friday, the 16-nation currency touched its strongest level since April, when it reached US$1.3495.
The yen strengthened 1.9 percent against the greenback to ¥84.26 per US dollar. Japan’s currency slid as far as ¥85.40 on Friday as traders speculated Japan sold the currency again. The euro rose 1.5 percent to ¥113.69.
The euro strengthened during four of the past five days as Ireland, Spain, Greece and Portugal found sufficient demand to sell sovereign debt. On Tuesday Ireland sold 1.5 billion euros (US$1.97 billion) in a bond auction and Spain sold 7 billion euros of 12-month and 18-month bills, the maximum target. Greece sold 390 million euros of 13-week Treasury bills at a yield of 3.98 percent, the Athens-based Public Debt Management Agency said.
The Swiss franc reached a record high against the US dollar as Japan’s intervention in the market for its currency stoked demand for an alternative to the yen amid speculation the US economy will weaken. The franc reached SF0.9849 against the greenback, from SF1.0048 on Sept. 17.
The pound posted its biggest weekly decline against the euro since the five days ending May 21, weakening 2 percent to £0.8513 as of 5pm on Friday. Sterling strengthened 1.25 percent to US$1.5828.
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