US dollar rises to finish trade at NT$31.062 on Taipei forex
The U.S. dollar rose against the New Taiwan dollar Thursday, gaining NT$0.140 to close at NT$31.062 in the wake of a plunge in the local equity market after massive foreign institutional selling, dealers said.
Seizing the weakness of other regional currencies as a cause, the local central bank jumped onto the trading floor, as it has done regularly recently, to add more downward pressure on the New Taiwan dollar and further boost the U.S. dollar, the dealers said.
The greenback opened at NT$30.980 and moved between NT$30.788 and NT$31.065. Turnover totaled US$988 million during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar on a technical rebound from losses seen a session earlier, but soon fell into the red as traders here took their cues from a decision by the European Central Bank to keep pumping funds into the market, the dealers said.
However, the New Taiwan dollar’s momentum started to fade as the local bourse took a hit on futures-led selling, especially in the bellwether electronics sector, after foreign institutional investors built up short positions in the futures market, they said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$13.07 billion (US$421 million)-worth of local shares on the main board, sending the weighted index down 2.17 percentat the close.
Amid worries over Taiwan’s global competitiveness, the local central bank continued its intervention to prop up the U.S. dollar, with the bank’s presence appearing more visible in the latter part of the trading session and vaulting the U.S. currency back to the NT$31 mark before the end of the session, the dealers said.
The currencies in the region have been in an escalating depreciation competition as central bankers have been eager to keep their currencies cheaper in a bid to secure a larger share of the global market, they said.