US dol­lar declines to NT$31.062 in Taipei

The China Post - - TAIWAN BUSINESS -

The U.S. dol­lar fell against the New Tai­wan dol­lar Thurs­day, shed­ding NT$0.199 to close at NT$31.062, af­ter the U.S. Fed­eral Re­serve im­plied overnight that it will raise in­ter­est rates grad­u­ally, deal­ers said.

The dovish ap­proach by the Fed prompted traders in the re­gion to lower their U.S. dol­lar hold­ings, which pushed up the cur­ren­cies in the re­gion, in­clud­ing the New Tai­wan dol­lar, deal­ers said.

Amid worry over the ef­fects of a stronger New Tai­wan dol­lar, the lo­cal cen­tral bank con­tin­ued its in­ter­ven­tion in the mar­ket to prop up the U.S. dol­lar, help­ing the unit re­cover some of its ear­lier losses by the close, they added.

The green­back opened at NT$31.261, and moved be­tween NT$30.788 and NT$31.269 be­fore the close. Turnover to­taled US$912 mil­lion dur­ing the trad­ing ses­sion.

The U.S. dol­lar opened flat against the New Tai­wan dol­lar, but soon fell into the red as traders here took cues from re­marks by Fed Chair­woman Janet Yellen, and dumped their green­back hold­ings, deal­ers said.

Af­ter the Fed’s two-day pol­i­cy­mak­ing meet­ing, Yellen said the mar­ket should fo­cus on the pace and tra­jec­tory of in­ter­est rate in­creases rather than the tim­ing of the ini­tial hike, which led in­vestors to think that the Fed would raise in­ter­est rates grad­u­ally.

Deal­ers said bullish cur­rency traders were dis­ap­pointed by Yellen’s state­ment, which trig­gered selling in the U.S. cur­rency.

For­eign banks in Tai­wan also shifted to the sell side of the U.S. dol­lar, deal­ers said.

In the re­gion, the South Korean won and Ja­panese yen got a sig­nif­i­cant boost from Yellen’s state­ment, and the strength of the two cur­ren­cies gave a strong hint to traders here to buy into the New Tai­wan dol­lar, deal­ers said.

At one point, the U.S. dol­lar fell be­low the NT$30.80 mark, prompt­ing the lo­cal cen­tral bank to en­ter the trad­ing floor at the end of the morn­ing ses­sion, deal­ers said. The cen­tral bank’s pres­ence re­mained ev­i­dent dur­ing the af­ter­noon ses­sion, they said.

De­spite the strong show­ing of the New Tai­wan dol­lar, mar­ket sen­ti­ment re­mained cau­tious ahead of a fi­nance min­is­ters meet­ing in the eu­ro­zone later in the day to dis­cuss the Greece debt prob­lem, deal­ers said.

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