US dollar climbs to finish at day’s high of NT$31.002 on Taipei forex
The U.S. dollar rose against the New Taiwan dollar Tuesday, gaining NT$0.032 to close at the day’s high of NT$31.002 on moderate trading volume, ahead of United States economic data that was due later in the day, dealers said.
Taiwan’s central bank entered the trading floor late in the session, helping the U.S. dollar to recoup its earlier losses and finish at NT$31, dealers said.
The greenback opened at NT$31.000, and moved to a low of NT$30.765 before rebounding. Turnover totaled US$792 million during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar on follow-through buying from the previous session, but soon fell into negative territory as traders here were motivated by the gains on the local equity market, which raised demand for the local currency, dealers said. The local main board closed up 0.52 percent Tuesday.
The New Taiwan dollar also rebounded strongly as traders took advantage of the recent upturn of the U.S. dollar. After the local currency’s initial significant gains, it moved in a narrow range until the central bank’s intervention, dealers said.
Before the central bank’s intervention, the weakness of other regional currencies such as the Japanese yen and the South Ko- rean won deflated the New Taiwan dollar to some extent. The regional currencies had dropped after the U.S. reported a better-than expected increase of 5.1 percent in home sales in May to the highest in more than five years, dealers said.
The falling won also reflected fears that the Bank of Korea would try to drag down the value of the currency further amid a depreciation competition in the region, they said.
Late in the trading session, the local central bank jumped onto the trading floor, helping to the U.S. dollar to return to the NT$31 mark, a level the central is believed to be maintaining in the short term in an attempt to protect Taiwan’s exports, dealers said.
Despite the central bank’s intervention, turnover remained moderate as many traders preferred to stay on the sidelines, awaiting more economic data from the U.S. and hints of when the U.S. Federal Reserve will adjust its monetary policy, dealers said.