The New Taiwan dollar rose from a six-month low against the US dollar on speculation a US government takeover of the two largest financiers will encourage global investors to buy emerging-market assets.
Asian currencies gained against the dollar yesterday after the US government seized control of Fannie Mae and Freddie Mac, the biggest step yet in US officials’ efforts to grapple with a yearlong credit crisis that has caused more than US$500 billion of losses and writedowns. The NT dollar declined for the last seven weeks on sales of local stocks by overseas investors.
“It’s a shift we’re seeing in all of the emerging-market, perceived-riskier currencies,” said Dwyfor Evans, a strategist at State Street Global Markets in Hong Kong.
“The government bailout from the US bolsters global investor risk appetite and supports the US consumer as far as Asian exporters are concerned,” he said.
The NT dollar strengthened 0.2 percent to close at NT$31.799 against the greenback, the Taipei Forex Inc showed. It earlier rose as much as 1.2 percent to NT$31.498 per US dollar. The currency touched NT$31.908 on Sept. 5, the weakest it has been since Feb. 13.
Nine of the 10 most-active Asian currencies outside Japan strengthened against the greenback yesterday.
Government bonds were little changed. The yield on the 2 percent bond maturing July 2013 was at 2.261 percent as of the 1:30pm close in Taipei, said GreTai Securities Market, Taiwan’s biggest exchange for bonds. Its price fell 0.0016, or NT$1.6 per NT$100,000 face amount, to 98.8079.
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