Taiwan’s dollar advanced for a second day as the failure of Republicans and Democrats to agree on a plan to tackle U.S. debt unsettled global financial markets and weighed on the greenback. President Barack Obama’s Office of Management and Budget said it “strongly opposes” House Speaker John Boehner’s two- step plan to raise the $14.3 trillion debt ceiling and cut $3 trillion in expenditure, on which the Republican-controlled House is set to vote on tomorrow. The Dollar Index, which tracks the greenback versus the currencies of six major trading partners, touched a 12-week low today. “There’s appreciation pressure on the Taiwan dollar given the greenback is so weak because of the debt-ceiling problem,” said Tarsicio Tong, a Taipei-based foreign-exchange trader at the Union Bank of Taiwan. “Trading volume is thin as everyone’s waiting to see if there’s any progress made today in the U.S.” Taiwan’s dollar strengthened 0.1 percent to NT$28.802 against its U.S. counterpart as of the 4 p.m. local time close, according to Taipei Forex Inc. Tong forecast the currency could surpass the NT$28.70 level by the end of the week. Taiwanese bonds were little changed before the government sells NT$30 billion ($1 billion) of 20-year bonds tomorrow. The yield on the 2 percent notes due July 2016 was 1.191 percent, compared with 1.195 percent yesterday, prices from Gretai Securities Market show. The rate reached 1.22 percent on July 22, the highest level for a benchmark five-year security since January 2009. The overnight money-market rate, which measures interbank funding availability, was little changed at 0.383 percent, according to a weighted average compiled by the Taiwan Interbank Money Center. To contact the reporter on this story: Andrea Wong in Taipei at awong268@bloomberg.net To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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