Greenback closes lower at NT$30.922 on the Taipei forex
The U.S. dollar fell against the New Taiwan dollar Wednesday, shedding NT$0.080 to close at NT$30.922 as traders took cues from the disappointing factory orders data in Washington overnight and cut their greenback holdings, dealers said.
A rebound by other regional currencies gave additional indications to traders here to buy into the New Taiwan dollar, before the local central bank stepped in to prop up the U.S. currency, dealers said.
The greenback opened at the day’s high of NT$31.002, and moved to a low of NT$30.770 before rebounding. Turnover totaled US$700 million during the trading session.
The U. S. dollar opened flat against the New Taiwan dollar, but soon fell into negative territory in the wake of the latest U. S. economic data, which showed a 0.4 percent drop in factory orders for April after a 2.2 percent increase in March, dealers said.
The poor factory order report resulting from falling demand for electronics and aircraft raised concerns over the U.S. economy, the largest in the world, and prompted traders in the region to cut their greenback positions, dealers said.
The strength of other regional currencies, in particular the Japanese yen and the South Korean won, led traders here to expand their New Taiwan dollar holdings as they took advantage of worry over the U.S. economic climate, dealers said.
Before the local central bank entered the trading floor, foreign institutional selling in the local equity market deflated the New Taiwan dollar to some extent.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$3.06 billion (US$98.96 million) worth of local shares on the main board Wednesday.
The local central bank again entered the market late in the trading session, helping the U. S. dollar to recoup most of its earlier losses, as the bank tried to protect Taiwan’s exports amid a currency depreciation competition in the region, dealers said.
Turnover in the local foreign exchange market remained moderate as many traders stepped back from the trading floor, waiting for the conclusions of a European Central Bank policymaking meeting that were due later in the day, dealers said.