Green­back closes higher at NT$31.682 on Taipei forex

The China Post - - TAIWAN BUSINESS -

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.

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