US dollar closes higher on Taipei forex to NT$31.726
The U.S. dollar rose against the New Taiwan dollar Tuesday, gaining NT$ 0.021 to close at NT$31.726 after Taiwan’s central bank jumped into the market to prop up the greenback, helping the currency recoup its early losses, dealers said.
The central bank’s intervention aimed to send the New Taiwan dollar lower to boost Taiwan’s exports at a time when other regional currencies, in particular the South Korean won, were still depreciating against the U.S. dollar, they said.
The greenback opened at NT$31.745, and moved between NT$31.581 and NT$31.760 before the close. Turnover totaled US$882 million during the trading session.
The U.S. dollar opened higher on follow-through buying from a session earlier, but selling emerged to push the currency into the red after the New Taiwan dollar staged a technical rebound, dealers said.
Foreign institutional buying on the main board further lifted demand for the New Taiwan dollar and pushed up the currency even higher, they said. According to the Taiwan Stock Exchange, foreign investors bought a net NT$3.20 billion (US$100.86 million) worth of local shares on the local main board Tuesday.
Despite the foreign net buy recorded on the main board, some other foreign investors still moved their funds out of the country to let some air out of the New Taiwan dollar on hopes that the U.S. Federal Reserve will raise interest rates later in the year, which is expected to give a boost to the U.S. dollar, dealers said.
In the late trading session, Taiwan’s central bank made a presence in the currency market, buying into the U.S. dollar by seizing on the weakness of the won as a justification to push the New Taiwan dollar down, they said.
The buying by the local central bank of the U.S. dollar is expected to continue as long as other regional currencies keep trending lower in reflection of a likely rate increase in the U.S. market, they added.
Dealers said that it seemed that Taiwan’s central bank will lead the U.S. dollar to trend further higher and head toward the NT$32 mark in a bid to protect Taiwan’s exporters.