Green­back fin­ishes trade higher at NT$31.052 on Taipei’s forex

The China Post - - TAIWAN BUSINESS -

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.

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