US dol­lar closes lower on Taipei forex at NT$32.937

The China Post - - TAIWAN BUSINESS -

The U. S. dol­lar fell against the New Tai­wan dol­lar Tues­day, shed­ding NT$0.065 to close at NT$32.937 amid ris­ing op­ti­mism that the U.S. Fed­eral Re­serve is in no hurry to kick off an in­ter­est rate hike cy­cle, deal­ers said.

The strength of other re­gional cur­ren­cies also added down­ward pres­sure on the U.S. dol­lar be­fore Tai­wan’s cen­tral bank stepped in to cut its New Tai­wan dol­lar hold­ings, help­ing the U.S. cur­rency to re­coup most of its ear­lier losses at the close, the deal­ers said.

It was the first ses­sion in which the U.S. dol­lar stood be­low the 33 point mark since Sept. 22, when the cur­rency ended at NT$32.971 against the New Tai­wan dol­lar.

The green­back opened at NT$33.002 and moved be­tween NT$32.660 and NT$33.009 be­fore the close. Turnover to­taled US$811 mil­lion dur­ing the trad­ing ses­sion.

The U.S. dol­lar opened flat but soon dipped into the red as more and more traders an­tic­i­pated that the U.S. Fed will slow its pace in rais­ing key in­ter­est rates, the deal­ers said.

The hopes were re­in­forced by dis­ap­point­ing U.S. non-farm pay­roll data re­leased Oct. 2. In Septem­ber, the U.S. econ­omy cre­ated 142,000 jobs, lag­ging far be­hind an ear­lier mar­ket ex­pec­ta­tion of 203,000, with the job­less rate steady at 5.1 per­cent, they said.

Op­ti­mism about no im­me­di­ate rate hike by the Fed prompted for­eign in­vestors to move funds into the re­gion, which gave a sig­nif­i­cant boost to cur­ren­cies in the re­gion, in par­tic­u­lar the South Korean won, the deal­ers said.

As the New Tai­wan dol­lar tends to track the won closely, the stronger won gave more in­cen­tives to traders to buy into the lo­cal cur­rency, while net buy­ing by for­eign in­sti­tu­tional in­vestors in the lo­cal eq­uity mar­ket also lent sup­port to the lo­cal unit, they said.

Ac­cord­ing to the Tai­wan Stock Ex­change, for­eign in­sti­tu­tional in­vestors bought a net NT$2.56 bil­lion (US$77.72 mil­lion)-worth of shares on the lo­cal main board, send­ing the weighted in­dex up 0.49 per­cent at the close.

The lo­cal cen­tral bank made its pres­ence felt again in the late trad­ing ses­sion in a bid to slow the pace of the New Tai­wan dol­lar’s ap­pre­ci­a­tion and make Tai­wan made prod­ucts cheaper in the global mar­ket, the deal­ers said.

De­spite Tues­day’s gains, the deal­ers said, the New Tai­wan dol­lar is ex­pected to trend lower in the near fu­ture due to the cen­tral bank’s in­ter­ven­tion.

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