US dollar closes lower on Taipei forex at NT$32.937
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.