US dollar climbs NT$0.080 to end at day’s high of NT$31.132 on Taipei forex
The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.080 to close at the day’s high of NT$31.132 with market sentiment cautious about the debt situation in the eurozone, dealers said.
Taiwan’s central bank jumped into the trading floor, as it has done regularly in recent sessions, to prop up the U.S. dollar, helping the currency recoup its earlier losses at the close, they said.
The greenback opened at NT$31.080, and moved to a low of NT$30.890 before rebounding. Turnover totaled US$863 million during the trading session.
The U. S. dollar opened up against the Taiwan dollar on follow-through buying from a session earlier, but selling followed as traders here took advantage of the local central bank’s intervention in buying the greenback a day earlier to dump the U.S. unit in exchange for the local unit at a more preferable exchange rate, dealers said.
A move by the People’s Bank of China to raise the Chinese yuan’s reference rate by 0.02 percent against the U.S. dollar encouraged traders here to sell more of the greenback, they said.
Foreign institutional buying in the local equity market also boosted demand for the Taiwan dollar. According to the Taiwan Stock Exchange, foreign institutional inves- tors bought a net NT$2.26 billion (US$72.59 million) worth of local shares on the main board Friday.
In the late trading session, the local central bank stepped into the market, buying into the U.S. dollar to vault the currency back to the NT$31 mark, a level the market believes the central bank wants to maintain in the near term, dealers said.
Traders appeared cautious throughout the session after debt- ridden Greece failed to reach a consensus with its creditors over night after the country’s reform package was rejected earlier this week, dealers said.
With the June 30 debt repayment deadline for Greece approaching, currency traders turned more wary amid fears over a default by the European country if no agreement is struck on time.
Another meeting on the Greece debt is scheduled for Saturday.