Taiwan dlr recovers; c.bank, Goldman fears ease

The Taiwan dollar recovered from central bank intervention in the previous session and guardedly tracked Asian assets higher as alarm over the fraud charges aimed at Goldman Sachs waned around the region, dealers said.
The central bank, which limits foreign exchange fluctuations and discourages speculation to keep the export-driven economy on track, sold Taiwan dollars on Monday to offset gains that had sent the unit to a 20-month high last week, dealers said.
Prices returned to pre-intervention levels in early trade on Tuesday.
Further supporting the Taiwan dollar, appetite for growth-linked currencies slowly resumed on Tuesday as upbeat earnings data from the United States overrode fears of a ripple effect after the United States charged Goldman Sachs with fraud last week.
"One possibility is that underlying global risk appetite remains strong," said Olivier Desbarres, head of Asian forex strategy with Credit-Suisse in Singapore. "The sell-off in Asian currencies was never that dramatic."
Taiwan's currency was expected to rise slowly in the near term as a result of strong trade relations with China and expectations that Beijing would let the yuan appreciate, driving up the Taiwan dollar as a proxy, dealers said.
A string of postive data from the United States, pointing toward recovery in Taiwan's No.2 export market, should also help the currency in coming months, strategists said.
But future currency gains may slow from March, dealers said, as the market watches regional factors from Goldman to the volcanic ash cloud in Europe that has crippled air traffic.
The Taiwan dollar had risen 1.95 percent this year as of Monday, although it lags Asian peers.
0200 GMT PREVIOUS DAY T$ 31.442 31.492 T$ 31.438 31.430 Six-month NDFs.
Taipei Forex Inc is Taiwan's main forex exchange; Cosmos is a smaller exchange. NDF quotations from Prebon Asia.