US dollar closes higher at NT$31.131 on Taipei forex

The China Post - - TAIWAN BUSINESS -

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.

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