Taiwan dollar falls on drop in U.S. sentiment

The island's TAIEX share index, which has rallied 64 percent this year, slid 1.6 percent yesterday. New York University Professor Nouriel Roubini said Tuesday that he sees a bubble in emerging-market equities and that gains in some developing-nation currencies are becoming “excessive.” The Taiwan dollar “is relatively stable,” the central bank said Tuesday, after the currency weakened 0.3 percent.

“Investors may be channeling funds away from Asian stocks,” said Yang Kung-yi, a currency trader at Shanghai Commercial & Savings Bank in Taipei. “The central bank is still conservative, hoping to keep the currency relatively weak.”

The local dollar fell to NT$32.496 against its U.S. counterpart as of the 4 p.m. local close, from NT$32.480 yesterday, according to Taipei Forex Inc. The currency reached NT$31.995 on Oct. 1, the strongest level since September 2008.

The U.S. Conference Board's consumer confidence index dropped to 47.7 in October, from a revised 53.4 in September, a report from the New York based private research group showed Tuesday. That was the lowest level since July.

Overseas investors sold NT$10.9 billion more Taiwan shares than they bought yesterday, according to stock exchange data, trimming this year's net purchases to US$12.4 billion.

The Central Bank of the Republic of China (Taiwan) will “maintain order” if irregular factors cause excessive volatility in the foreign-exchange market, the monetary authority said on Sept. 30. The exchange rate reflects “economic conditions,” it said.

Taiwan's export orders, an indication of shipments in the next one to three months, fell for a 12th straight month in September, an economic ministry report showed on Oct. 23.

The yield on the 1.375 percent bond maturing September 2019 climbed two basis points to 1.41 percent, according to Gretai Securities Market, Taiwan's biggest fixed income exchange. Its price fell 0.1553, or NT$155.3 per NT$100,000 face amount, to 99.6605. A basis point is 0.01 percentage point.

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