US dollar closes at NT$32.366 on Taipei forex
The U.S. dollar fell against the Taiwan dollar Thursday, shedding NT$0.099 to close at NT$32.366 as a smaller decline of the Chinese yuan against the greenback prompted traders here to pick up the local currency, dealers said.
As other regional currencies kept moving lower against the U.S. dollar, Taiwan’s central bank jumped onto the trading floor to prop up the U.S. currency in a bid to slow the pace of the Taiwan dollar’s appreciation, the dealers said.
The greenback opened at the day’s high of NT$ 32.465 and moved to a low of NT$32.020 before rebounding. Turnover totaled US$1.128 billion during the trading session.
The U.S. dollar opened flat but soon fell into negative territory as traders took hints from a relatively stable yuan to raise their holdings in the Taiwan dollar, placing downward pressure on the U.S. unit, the dealers said.
The slower decline of the yuan came after the People’s Bank of China (PBOC) said a day earlier that the Chinese currency has no basis for further depreciation as the economic fundamentals remained sound, they said.
Still, the PBOC cut the yuan’s reference rate against the U.S. dollar again Thursday, although the 1.1 percent cut was smaller than the magnitude in reduction seen in the previous two sessions.
The PBOC’s efforts to urge currency traders in the regional market to calm down led foreign banks in Taiwan to lock in their gains built for the U.S. dollar in the past two sessions, the dealers said.
Buying in the Taiwan dollar accelerated in the afternoon session, further dragging down the U.S. dollar to below the NT$30.10 mark and leading the greenback closer to the NT$30 level before the local central bank stepped in, they said.
Since expectations of an interest rate hike by the U.S. Federal Reserve later this year remain in place, the currencies in the region could face selling down the road, the dealers said.
They said that a currency depreciation competition is not over yet, so further intervention by the central bank is expected to continue to keep the Taiwan dollar cheaper and protect Taiwanese exporters.
New Taiwan Dollar and U.S. Dollar notes are seen in this photo taken yesterday. The greenback fell against the Taiwanese currency yesterday, shedding NT$0.099 to close at NT$32.366.