Greenback closes unchanged at NT$31.052 on Taipei exchange
The U.S. dollar closed unchanged from a session earlier at NT$31.052 Thursday, with market sentiment cautious ahead of the outcome of an ongoing policymaking meeting held by the local central bank, dealers said.
Many traders were remaining alert over the debt problems in Greece after international creditors of the European country rejected its reform proposals, the dealers said.
Taiwan’s central bank continued its intervention efforts to prop up the U.S. dollar, helping the currency recoup its earlier losses to close above the NT$31 mark, they added.
The greenback opened at NT$31.055 and moved between NT$30.893 and NT$31.060 before the close. Turnover totaled US$744 million during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar, but soon encountered selling since the local equity market staged a rebound on the back of foreign institutional buying, the dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$10.37 billion (US$334 million)-worth of local shares on the main board Thursday, which gave a boost to demand for the New Taiwan dollar.
As it has done regularly in recent sessions, the central bank entered the trading floor in the latter part of the trading session, dumping the New Taiwan dollar in exchange for the U.S. dollar in a bid to protect Taiwan’s exports at a time when the country has been suffering a decline in its outbound sales, the dealers said.
Despite the central bank’s intervention, turnover on the local foreign exchange market remained moderate, indicating that many traders preferred to stay on the sidelines awaiting the conclusion of the bank’s quarterly policymaking meeting, the dealers said.
As the local economy has shown signs of slowing, the market had widely anticipated that the central bank would leave its key interest rates unchanged to keep liquidity high, they said. Renewed concerns over the debt situation in the eurozone also kept traders here at bay, as they feared that the rejection of Greece’s reform package by its creditors will lead to a Greek default, the dealers added.