Greenback falls against New Taiwan dollar, to NT$31.113; drop stymied by central bank
The U.S. dollar fell against the Taiwan dollar Wednesday, shedding NT$0.060 to close at NT$31.113 as the local currency followed its regional counterparts in moving higher against the greenback, dealers said.
Foreign institutional buying in Taiwan’s stock market also encouraged foreign exchange traders here to cut their holdings in the U.S. dollar and buy the Taiwan dollar throughout the day, they said.
Still, the losses suffered by the U.S. dollar were partly recouped when Taiwan’s central bank intervened to slow down the pace of the local currency’s appreciation and keep it from hurting Taiwan’s export competitiveness, dealers said.
The greenback opened at NT$31.180, and moved between NT$31.016 and NT$31.189 before the close. Turnover totaled US$793 million during the trading session.
The U.S. dollar opened higher against the Taiwan dollar on follow-through buying from a session earlier, but soon fell into negative territory as other regional currencies, such as the South Korean won, gained strength.
The won, which is closely tracked by the Taiwan dollar because of the intense competition for export markets between Taiwanese and South Korean companies, got a boost from the gains posted by the Korea Stock Exchange Kospi index, which hit a four-year high.
Traders in Taipei seized on the won’s upturn to pick up the Taiwan dollar, a move reinforced by a techni- cal rebound in Taiwan’s market fueled by buying in high-tech heavyweights, dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$6.34 billion (US$204 million) in local shares on the main board to send the weighted index 0.82 percent higher at the close.
As a result, the U.S. dollar fell below the NT$31.10 mark at one point before the central bank stepped in to prop it up, dealers said.
Some traders even appeared willing to give up some of the Taiwan dollar’s gains amid fears of further intervention by the central bank, which is reportedly working with the Financial Supervisory Commission to fend off Taiwan dollar speculation by foreign investors, they said.