Halister News

(Bloomberg) -- Taiwan dollar rallies to two-week high as foreign investors buy local equities, while government bonds were sold after weaker-than-expected demand at an auction

• TWD rises 0.11% to close at 32.221 vs USD; it traded as high as 32.203 during the day, the strongest since June 8
• The currency has been supported by foreign funds inflow into its equity market since end of May, says Eddie Cheung, Asia FX strategist at Standard Chartered; Lower volatility than other Asian currencies could buffer it from external risk events such as Brexit
  • Sees further gains for TWD if U.K. votes to remain within EU
  • Expects CBC to cut benchmark rate by 12.5 bps at June 30 meeting, though that could have limited impact on the currency
• Overseas investors buy net NT$5.39b ($167.23m) stocks today
• Yield of 10-yr Taiwan govt bond rises 0.1 bp to close at 0.8%; intraday high at 0.8087%, highest since June 3
  • Yield gains as sentiment was hurt after yday 5-yr note auction show demand was weaker than expected, says Edward Chang, Taipei-based bond trader at Fubon Financial
  • Still, CBC is likely to cut rates this month; suggests buying 10-yr note at around 0.8%
  • Expects 10-yr bond yield in 0.79%-0.81% range before U.K. referendum; 5-yr note yield within 0.56%-0.58%
• Yield of 5-yr bond falls 0.85 bps to 0.5640% on when-issued trading