Greenback closes lower on Taipei forex at NT$32.765
The U.S. dollar fell against the New Taiwan dollar Wednesday, shedding NT$0.114 to close at NT$32.765 as foreign investors continued moving funds into the region amid reduced chances of an interest rate hike in the United States in September, dealers said.
The strength of other regional currencies, in particular the South Korean won, gave a strong indication to traders here to raise their New Taiwan dollar holdings, before Taiwan’s central bank stepped in to cap the upturn, dealers said.
It was the second consecutive session that the U.S. dollar fell against the New Taiwan dollar after a seven-session hike.
The greenback opened at NT$32.885, and moved between NT$32.400 and NT$32.890 before the close. Turnover totaled US$1.060 billion during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar on follow-through buying from the previous session, but soon fell into negative territory in the wake of foreign fund inflows into the region, dealers said.
Amid turmoil in the global financial markets amid concerns over the mainland Chinese economy, the second largest in the world, more and more currency traders are thinking that the U.S. Federal Reserve would be in no hurry to kick off an interest rate hike cycle, dealers said.
The market had been anticipating a U.S. interest rate increase in September but that now appears unlikely and some traders are projecting that the increase will not take place until next year, dealers said.
Against that backdrop, foreign investors continued to move their funds into the region, helping to push up the regional currencies, including the New Taiwan dollar, dealers said.
At one point, the South Korean won, which is closely tracked by the New Taiwan dollar because of the global competition between the two economies, rose 0.72 percent against the U.S. dollar. The won’s gains spurred selling in the greenback in Taiwan’s foreign exchange market, dealers said.
The U.S. dollar fell to NT$32.40 before the local central bank jumped onto the trading floor to slow down the pace of the New Taiwan dollar’s appreciation, as local exporters have been feeling the pinch of weakening global demand, dealers said.