US dollar ends day higher at NT$31.755 on the Taipei forex
The U.S. dollar rose against the New Taiwan dollar Thursday, gaining NT$0.005 to close at NT$31.755 on thin turnover as traders stayed on the sidelines ahead of the release of the July U.S. job report later in the week, dealers said.
Taiwan’s central bank jumped into the trading floor in the late session, as it has done almost every session recently, helping the U.S. dollar recoup its earlier losses in a bid to keep Taiwan’s exports cheaper in the global market, they said.
The greenback opened at NT$31.752, and moved between NT$31.626 and NT$31.760 before the close. Turnover totaled US$572 million during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar but soon fell into the red as traders here took cues from a technical rebound staged by the South Korean won to buy into the local currency, dealers said.
The won’s strength resulted from short-covering by traders after the South Korean won fell sharply in recent sessions to become one of the worse performing currencies in the region, they said.
As Taipei and Seoul compete fiercely with each other in the global market, the New Taiwan dollar tended to follow the fluctuations of the won so that the won’s gains gave a strong indication to traders here to pick up the local currency, they added.
Before the local central bank’s intervention, the New Taiwan dollar was deflated by a plunge in the local equity market, dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$2.89 billion ( US$91.01 million) worth of local shares, sending the weighted index down 1.08 percent at the close.
Despite the central bank’s buying of the U.S. dollar, trading volume remained thin as many traders preferred to step back from the trading floor before they have more clues about the U.S. economy, including the upcoming July jobless rate, dealers said.
Overnight, Washington reported the Institute for Supply Management’s services sector index rose to 60.3, its highest level since August 2005, beating a market estimate of 56.2, which pointed to an enhanced possibility of an interest rate hike by the U.S. Federal Reserve.