Greenback closes higher at NT$31.682 on Taipei forex
The U. S. dollar rose against t he Taiwan dollar Friday, gaining NT$ 0.081 to close at NT$ 31.682 as weaker- thanexpected gross domestic product ( GDP) growth hurt demand for the local currency, dealers said.
Foreign institutional buying in the local equity market helped the Taiwan dollar fend off downward pressure to some extent, but Taiwan’s central bank kept buying into the U. S. dollar in the latter part of the trading session to maintain the strength of the U. S. currency, the dealers said.
The greenback opened at NT$ 31.625 and moved between NT$ 31.507 and NT$ 31.685 before the close. Turnover totaled US$ 1.251 billion during the trading session.
The U. S. dollar got a boost from Taiwan’s poor GDP growth as traders seized the news to dump the Taiwan dollar amid weakening global demand, which hurt the country’s exports, the dealers said.
The Directorate General of Budget, Accounting and Statistics announced that morning that Taiwan’s GDP rose only 0.64 year- on- year in the second quarter, far behind its earlier estimate of a 3.05 percent increase. During the quarter, Taiwan’s exports fell 1.30 percent from a year earlier, compared with a previous forecast of a 3.27 percent rise.
The latest GDP data prompted foreign traders to remit funds from the island on expectations that the Taiwan dollar will weaken further, igniting the downtrend suffered by the local unit, the dealers said.
However, foreign institutional investors remained on the buy side on the local main board Friday, registering a net buy of NT$ 1.09 billion ( US$ 34.40 million) worth of local shares, which reduced pressure on the Taiwan dollar, they said.
Seizing the weakness of other regional currencies, in particular the South Korean won, the local central bank stepped in again during the late trading session to give another shot to the U. S. dollar in a bid to make Taiwan’s products more competitive in the global market, the dealers said.
The losses incurred by the currencies in the region reflected hopes that the U. S. Federal Reserve will raise interest rates later in the year, they said.