US dollar closes higher at NT$31.131 on Taipei forex
The U. S. dollar rose against the New Taiwan dollar Thursday, gaining NT$0.018 to close at NT$31.131 after trading in a slow session on moderate turnover, dealers said.
Cautious sentiment toward the New Taiwan dollar became evident after it was reported in the media that the country’s central bank and Financial Supervisory Commission (FSC) were teaming up to prevent speculation in the local currency by foreign investors, dealers said.
The relatively quiet session also showed that many traders here had taken to the sidelines after China, the world’s second largest economy, reported a slowdown in manufacturing activity, dealers added.
The greenback opened at the day’s high of NT$31.150, and moved to a low of NT$31.050 before rebounding. Turnover totaled US$606 million during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar on a mild technical rebound from the previous session, but soon dipped into negative territory as traders increased their holdings in the local currency, encouraged by a strong showing of the local bourse, dealers said.
On Thursday, foreign institutional investors bought a net NT$22.38 billion (US$719 million) worth of local shares on the main board, pushing up the weighted index 1.91 percent by the close, according to the Taiwan Stock Exchange.
However, the gains posted by the New Taiwan dollar appeared to be limited amid concerns over the reported joint efforts by the local central bank and FSC to prop up the U.S. dollar, dealers said.
Local media reports said the central bank and FSC are working together to encourage foreign institutional investment in the stock market rather than in the foreign exchange market so as to reduce market speculation in the New Taiwan dollar.
Concerns over China’s economic climate also discouraged traders in the region from buying into regional currencies, after China reported that its purchasing managers’ index (PMI) for April had dropped from 49.6 to 49.2, according to an HSBC/Market report.
The U.S. dollar traded in a slow session against the New Taiwan dollar before the central bank entered the trading floor late in the session, helping the greenback return to positive territory by the close, dealers said.