US dollar closes lower on forex at NT$32.879 as stocks rebound
The U. S. dollar fell against the New Taiwan dollar Tuesday, shedding NT$0.081 to close at NT$32.879 as the local equity market staged a strong rebound, boosting demand for the local currency, dealers said.
The strength of other regional currencies, in particular the South Korean won, gave traders here a strong hint to pick up the New Taiwan dollar, while Taiwan’s central bank jumped into the trading floor to cap the gains posted by the local currency, they said.
The upturn of the New Taiwan dollar, which rebounded from a six-year low seen Monday, stopped a seven-session winning streak for the U.S. dollar at a time when the region remained in a currency depreciation competition.
The greenback opened at NT$32.970, and moved between NT$32.620 and NT$33.000 be- fore the close. Turnover totaled US$1.178 billion during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar on follow-through buying from a session earlier, but soon fell to negative territory as traders here witnessed the local equity market bouncing back sharply on hopes that the government will lend support to prop up market confidence, dealers said.
Led by large-cap stocks in both financial and electronics sectors, the weighted index on the Taiwan Stock Exchange closed up 3.58 percent at 7,675.64 Tuesday after foreign institutional investors bought a net NT$3.66 billion (US$111 million) worth of shares.
A rising won also encouraged traders here to pick up the New Taiwan dollar on reduced hopes that the U.S. Federal Reserve will kick off an interest rate hike in September as the global economy has showed signs of weakening, dealers said.
Amid the recent sell-off in the global equity markets, many traders have expected that the Fed is in no hurry to raise interest rates for fear of imposing a further adverse impact on the world’s economy, they said.
With the government having cut its forecast for Taiwan’s economic growth to 1.56 percent from 3.28 percent for 2015, citing weakerthan-expected global demand, the local central bank remained on a path of intervention to keep the local currency cheaper for a larger share in the global market, dealers said.
After the U.S. dollar fell below the 32.70 mark at one point Tuesday, the central bank’s buying appeared more visible to push the greenback back up to a level even closer to NT$32.90 at the close, they said.