The NT dollar advanced the most in six weeks as economists predicted exports grew for a 13th month, boosting speculation investors will increase holdings of Taiwan’s assets.
The currency gained for a third day as Federal Reserve Chairman Ben Bernanke said the purchase of more bonds beyond the US$600 billion announced last month is “certainly possible,” according to a transcript of an interview on CBS Corp.
Overseas shipments rose 18.9 percent last month from a year earlier, compared with an increase of 21.9 percent the previous month, according to the median estimate of economists in a Bloomberg survey before a Ministry of Finance report tomorrow. Bonds gained.
“Economic data is still in a healthy situation,” said Yili Tang, head of the currency division at Shinkong Life Insurance Co (新光人壽) in Taipei. “Hot money will come into Asia, no doubt. The central bank will control the market.”
The NT dollar ended 0.4 percent stronger at NT$30.625 against its US counterpart, according to Taipei Forex Inc. The currency has appreciated 3.4 percent so far this quarter, the best performance among Asia’s most-traded currencies.
Overseas funds bought US$102 million more Taiwanese stocks than they sold yesterday, boosting net purchases this year to US$7.06 billion, exchange data showed.
Taiwan’s currency was up 2 percent a minute before the close and later trimmed gains as the central bank sold the local dollar, said a trader familiar with the authority’s operations, who declined to be identified.
The NT dollar has pared gains or weakened in the final minutes of trading on most days in the past eight months as policy makers bought the US dollar, according to traders familiar with the central bank’s operations who declined to be identified. Central banks intervene in currency markets by arranging purchases or sales of foreign exchange.
The yield on the 2 percent note due in July 2015 fell one basis point to 0.990 percent, according to GRETAI Securities Market, the nation’s biggest exchange for bonds. A basis point is 0.01 percentage point.
Meanwhile, China’s yuan rose against the US dollar ahead of a meeting of European finance ministers to discuss expanding the region’s bailout fund to curb the debt crisis.
The People’s Bank of China (中國人民銀行), which manages the exchange rate using a basket of currencies of major trading partners, set the yuan rate 0.1 percent higher at 6.6515 yuan against the US dollar, stronger for a third day. Belgian Finance Minister Didier Reynders said on Saturday the US$1 trillion fund may be increased if ministers decide to introduce a larger permanent facility.
“Europe will continue to be the dominant issue,” said Patrick Perret-Green, head of Asian foreign-exchange strategy at Citigroup Inc. “The yuan has only appreciated mildly compared to the bounce of other currencies against the dollar.”
The yuan rose 0.2 percent to 6.6477 yuan per US dollar as of 6pm in Shanghai, according to the China Foreign Exchange Trade System.
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