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Promising economic outlook may lift New Taiwan dollar

Promising economic outlook may lift New Taiwan dollar

The New Taiwan dollar may rise for a fourth day today on speculation quickening export and economic growth will draw investors.

The currency rose 0.7 percent against the U.S. dollar in the past month as Taiwan raised its gross domestic product forecast and global fund managers put more money in the island's equity market.

"We see some promising signs on the economy and we're in a somewhat strengthening trend for the Taiwan dollar," said Magnus Prim, a senior currency strategist in Singapore at Skandinaviska Enskilda Banken. "More inflow to Taiwan is a contributory reason" for an appreciating currency.

The New Taiwan dollar traded at NT$33.485 yesterday from NT$33.461 on Tuesday, according to Taipei Forex Inc. The currency may climb to NT$33 in a month, Prim said.

Euro under pressure

The yen remained close to recent lows against the dollar and euro in Asian trade yesterday as near-zero interest rates in Japan continued to weigh on market sentiment towards the currency, dealers said.

The dollar was at 120.85 yen in Tokyo deals, up from 120.82 yen in New York late on Tuesday. The euro stood at 142.29 yen, down from 142.39 yen in New York.

"Although the euro came under some selling pressure against the yen, Japan is the only major country which cannot possibly hike interest rates so the underlying firm tone of the euro against the yen will remain," said Sumitomo Trust and Banking foreign exchange customer dealer Norihiro Takemura.

The lack of any public objections to the yen's decline by Group of Seven finance ministers who met over the weekend was contributing to the currency's weakness.

"But the dollar-yen exchange rate seems to be stabilizing around the 121 yen mark and there are no major events this week," said Daisuke Uno, currency analyst at Sumitomo Mitsui Banking Corp. He noted that the market was now turning its attention to a U.S. Federal Reserve policy meeting next Tuesday.

Updated : 2022-05-28 19:09 GMT+08:00