Greenback ends the day lower at NT$31.261 on the Taipei forex
The U.S. dollar fell against the New Taiwan dollar Wednesday, shedding NT$0.005 to close at NT$31.261 after trading in a quiet session ahead of the conclusion of the U.S. Federal Reserve’s policymaking meeting, dealers said.
Taiwan’s central bank entered the local foreign exchange market in the late trading session, as it has done regularly in recent sessions, to help the U.S. dollar recover most of its earlier losses by the end of trading, they said.
The greenback opened at the day’s high of NT$31.266, and moved to a low of NT$30.896 before rebounding. Turnover totaled US$593 million during the trading session.
The U. S. dollar opened flat against the New Taiwan dollar, but soon fell to negative terri- tory as local exporters cut their greenback positions by taking advantage of the upturn enjoyed by the greenback in recent sessions, dealers said.
After the initial significant jump, the U.S. dollar moved in a narrow band as currency traders turned cautious about the on going Fed meeting, which is scheduled to end later in the day, they said.
While the market has widely expected that the Fed will start to raise interest rates in September at the earliest, many traders preferred to stay on the sidelines ahead of the meeting’s conclusion, dealers said.
Traders tended to wait for comments to be made by Fed Chair Janet Yellen for more clues about the U.S. central bank’s intentions on how to deal with its monetary policy, they said.
The strength of the South Korean won in the regional market added downward pressure on the U.S. dollar against the New Taiwan dollar. Traders here track the won before mapping out their strategies to trade the New Taiwan dollar as Taipei and Seoul compete fiercely in the global market.
Before the local central bank’s intervention, foreign institutional selling in the local equity market let some air out of the New Taiwan dollar, dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$10.50 billion (US$336 million) worth of local shares on the main board Wednesday, which lowered selling of the U.S. dollar to some extent they said.