US dollar closes at NT$31.750 on Taipei forex
The U.S. dollar rose against the New Taiwan dollar Wednesday, gaining NT$0.024 to close at NT$31.750 as the greenback bounced back from earlier losses on the back of buying by Taiwan’s central bank, dealers said.
The local central bank’s presence offset the impact on the U.S. dollar resulting from the weakness of other regional currencies, which came under pressure amid concerns over an interest rate hike by the U.S. Federal Reserve, the dealers said.
It was the fifth consecutive session in which the U.S. dollar had appreciated against the New Taiwan dollar.
The greenback opened at NT$31.760 and moved between NT$31.610 and NT$31.765 before the close. Turnover totaled US$935 million during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar but soon fell into the red as traders took cues from a technical rebound staged by the local equity market to raise their holdings in the New Taiwan dollar, the dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$433 million (US$13.64 million)-worth of local shares on the main board, sending the weighted index up 0.36 percent at the close.
The U.S. dollar fell below the NT$31.70 mark and moved closer to NT$31.60 at one point before the local central bank stepped in to prop up the currency, seizing selling in other regional currencies, including the South Korean won and the Japanese yen, as a cause to intervene, the dealers said.
The losses incurred by the won and the yen reflected worries over a rate hike by the Fed after Atlanta Fed President Dennis Lockhart, a voting member on the U.S. central bank’s board, told the Wall Street Journal a day earlier that the U.S. economy appears ready for a rate hike in September, they said.
Lockhart’s remarks surprised the market, as he pointed to a specific timeframe for the Fed to kick off an interest rate hike cycle, they added.
The dealers said that the local central bank’s intervention is expected to continue as the market anticipates that the bank is aiming to push up the U.S. dollar above the NT$32 level in the short term to keep Taiwan’s products cheaper in the world market.