Greenback finishes trade higher at NT$31.052 on Taipei’s forex
The U.S. dollar rose against the New Taiwan dollar Wednesday, gaining NT$0.050 to close at the day’s high of NT$31.052 on the back of the local central bank’s intervention to help the U.S. currency recoup its earlier losses, dealers said.
The early losses suffered by the U.S. dollar reflected foreign institutional buying in the local equity market, which boosted demand for the currency until the central bank moved in, the dealers said.
The greenback opened at NT$31.005 and moved to a low of NT$30.880 before rebounding. Turnover totaled US$836 million during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar on follow-through buying from a session earlier, but selling in the greenback emerged as foreign institutional investors shifted to the buy side on the main board, the dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$289 million (US$9.31 million)-worth of local shares on the main board Wednesday after a net sell of NT$1.30 billion recorded the previous day.
However, even ahead of the central bank’s intervention, the U.S. dollar’s downturn was limited by expectations that the Federal Reserve will raise interest rates twice this year, the dealers said.
Hopes of the Fed’s rate hikes were raised after Fed Governor Jerome Powell said overnight that he is prepared to raise interest rates twice this year — once in September and again in December — as long as the economy performs as expected.
Taiwan’s disappointing export orders for May also reined in buying of the New Taiwan dollar during the session, the dealers said. May export orders fell 5.9 percent from a year earlier, the second consecutive month in which export orders had dropped year-on-year.
In the late trading session, the central bank stepped in to prop up the U.S. dollar and vault the currency back to the NT$31 mark at the close, a level the market believes the central bank is aiming to maintain in the short term, the dealers said.