US dol­lar soars to end at day’s high of NT$32.465

The China Post - - FRONT PAGE -

The U.S. dol­lar rose against the New Tai­wan dol­lar Wed­nes­day, gain­ing NT$0.385 to close at the day’s high of NT$32.465, af­ter China’s cen­tral bank fur­ther cut the yuan’s ref­er­ence rate, send­ing re­gional cur­ren­cies into another tail­spin, deal­ers said.

Mas­sive selling by for­eign in­sti­tu­tional in­vestors on the lo­cal eq­uity mar­ket added down­ward pres­sure on the New Tai­wan dol­lar to push the the U.S. dol­lar even higher, they said.

The green­back opened at NT$32.130, and moved be­tween NT$31.970 and NT$32.465 be­fore the close. Turnover to­taled US$1.825 bil­lion dur­ing the trad­ing ses­sion.

The U.S. dol­lar opened higher against the New Tai­wan dol­lar on fol­low-through buy­ing from a ses­sion ear­lier, and mo­men­tum ac­cel­er­ated as traders rushed to sell the lo­cal cur­rency af­ter the Peo­ple’s Bank of China (PBOC) cut the yuan’s ref­er­ence rate sharply for the sec­ond day in a row, deal­ers said.

The Chi­nese cen­tral bank set the yuan’s ref­er­ence rate 1.62 per­cent lower on Wed­nes­day than on Tues­day, when the ref­er­ence fig­ure was slashed 1.86 per­cent.

The deep cuts sig­naled China’s in­ten­tions to use a cheaper cur­rency to boost its ex­ports at a time when its econ­omy has showed signs of a slow­down, deal­ers said.

The weak­ness of the yuan led to selling in other re­gional cur­ren­cies and set off a cur­rency de­pre­ci­a­tion com­pe­ti­tion.

Among the fall­ing re­gional units, the South Korean won’s steep losses against the green­back prompted traders here to dump more of their New Tai­wan dol­lar hold­ings, deal­ers said.

A fall­ing New Tai­wan dol­lar has led for­eign in­vestors to move their funds out of the coun­try, re­duc­ing de­mand for the lo­cal cur­rency.

Ac­cord­ing to the Tai­wan Stock Ex­change, for­eign in­sti­tu­tional in­vestors sold a net NT$8.79 bil­lion (US$271 mil­lion) in shares on the ex­change Wed­nes­day, send­ing the weighted in­dex down 1.31 per­cent at the close.

CNA

A woman fans out an as­sort­ment of New Tai­wan dol­lar and U.S. dol­lar notes in this photo taken in Taipei, yesterday.

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