US dollar closes higher at NT$31.302 on forex

The China Post - - TAIWAN BUSINESS -

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.

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