US dollar closes higher at NT$31.302 on forex
The U. S. dollar rose against the New Taiwan dollar Tuesday, gaining NT$ 0.027 to close at NT$ 31.302 amid fears that further intervention by the local central bank will further boost the greenback’s value, dealers said.
The central bank’s buying in the U. S. dollar emerged in the latter part of the session, as it has done almost every session recently, helping the currency recoup its earlier losses at a time when the region remains in a currency depreciation competition, the dealers said.
The greenback opened at NT$ 31.275 and moved between NT$ 31.032 and NT$ 31.305 before the close. Turnover totaled US$ 925 million during the trading session.
The U. S. dollar opened flat against the New Taiwan dollar but soon fell into negative territory as traders here were motivated by a technical rebound staged by the South Korean won and started to buy into the local currency, the dealers said.
The New Taiwan dollar fell sharply a day earlier as foreign institutional investors moved funds out of the region in expectations that the U. S. Federal Reserve will kick off an interest rate hike cycle in September, they said.
The earlier gains posted by the New Taiwan dollar against the U. S. dollar Tuesday were simply technical in nature and traders still expected the local currency to depreciate due to the interest rate hike in the U. S., they added.
After the initial rebound, the New Taiwan dollar kept moving in a narrow range before the local central bank stepped in to prop up the U. S. dollar value by the close, in a bid to protect Taiwan’s exports, the dealers said.
Expectations of further intervention by the local central bank were raised by Taiwan’s poor export data for May, which showed that the country’s outbound sales fell 3.8 percent from a year earlier, the fourth consecutive month to register a fall, they said.
Even before t he central bank’s presence, the U. S. dollar got some support from a plunge on the local main board, the dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$ 3.58 billion ( US$ 114 million)- worth of local shares, sending the weighted index down 1.88 percent by the close.