HALISTER1: INSIDE TAIWAN: TWD Slips; Foreigner Investors Selling: Traders

INSIDE TAIWAN: TWD Slips; Foreigner Investors Selling: Traders

(Bloomberg) -- Taiwan dollar falls 0.5% today, most since March 9, to close at 32.356 per dollar.
  • TWD’s decline partly on USD’s overnight gains, three traders say, with foreign investors selling Taiwan equities and buying USD; exporters sold USD/TWD above 32.300
  • Taiwan’s CPI rose 1.50% y/y in April after a 2.00% increase in March, according to median est. in Bloomberg survey; ests. range from 1.00% to 2.15%; April wholesale price index probably decline 4.15% y/y vs 4.94% contraction in March; both data due 8:30 am local time tomorrow
  • Taiwan unlikely to scale back FX intervention as a policy lever in addition to a rate cut, which is expected in June, despite U.S. Treasury including Taiwan on their watch list, Adarsh Sinha, FX strategist at BofAML writes in note received Tuesday
    • Both Korea and Taiwan will continue to implement measures to encourage overseas investment and less restrictive hedging regulations, which remain an acceptable way to weaken FX
  • Overseas investors sold a net of NT$13.7b ($422.37m) Taiwan stocks today
  • 1-mo. implied volatility rising 9 bps to 5.2775%; avg for past yr 6.9577%
  • Yield on 0.750% govt bonds due March 2026 edges down 1 bp at 0.8408%
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Adarsh Sinha (Merrill Lynch Asia Pacific Ltd)

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