US dol­lar closes at NT$32.366 on Taipei forex

The China Post - - TAIWAN BUSINESS -

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.

CNA

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.

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