The New Taiwanese dollar rose to a three-week high as a global equities rally revived demand for emerging-market assets. Bonds fell.
Eight of the 10 most-traded Asian currencies outside Japan strengthened against the US dollar after the Dow Jones Industrial Average posted its biggest gain since November. Citigroup Inc chief executive officer Vikram Pandit said yesterday the first two months of this year were profitable, spurring a 38 percent rise in the company shares.
“Sentiment has turned around for Asian currencies,” said Daniel Soh, an economist at Forecast Pte in Singapore. “Traders think that foreign appetite for emerging-Asian assets may revive sooner rather than later. People I talked to in private banking are saying their customers are snapping up shares.”
The NT dollar rose 0.7 percent to NT$34.36 as of 11:10am, Taipei Forex Inc said. It touched NT$34.239, the highest since Feb. 16.
“The central bank will enter the currency market when necessary to maintain order if there are irregularities in foreign-exchange trading,” central bank Governor Perng Fai-nan (彭淮南) said yesterday in a report to be presented to the legislature. The currency has been “relatively stable” compared with other regional currencies, the report said.
Asian stocks surged, with the MSCI Asia Pacific Index rising the most in six weeks, after Citigroup said it was having its best quarter since 2007. The TAIEX index gained 2.6 percent.
Taiwanese 10-year bonds fell for a second day, on speculation the government may increase bond sales to help fund public works projects as tax revenue falls.
The government is considering options including issuing more bonds as tax revenue this year may fall by NT$100 billion (US$2.9 billion), the Economic Daily News reported yesterday. Taiwan slid into a recession in the fourth quarter, prompting the Cabinet to announce a four-year, NT$858.5 billion stimulus plan, including infrastructure spending.
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US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
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