Greenback falls to close at NT$30.050 on Taipei forex
CNATAIPEI--The U.S. dollar fell against the New Taiwan dollar Wednesday, shedding NT$0.01 to close at NT$30.050 on low turnover after moving into consolidation mode, dealers said.
August 29, 2013, 12:22 am TWN
As it has done in recent sessions, the local central bank stepped in to prop up the U.S. dollar, vaulting the greenback back to the NT$30 mark, in a bid to boost Taiwan's competitive edge in the global market, the dealers said.
The greenback opened at the day's high of NT$30.070 and moved to a low of NT$29.975 before rebounding. Turnover totaled US$439 million during the trading session.
The U.S. dollar continued its momentum soon after the local foreign exchange market opened as local traders took hints from weaknesses in other regional currencies such as the South Korean won and the Indian rupee to cut their Taiwan dollar positions, the dealers said.
The weaknesses in regional currencies reflected an exodus of foreign funds from the region amid lingering fears over a possible early exit by the U.S. Federal Reserve from its monthly US$85 billion bond-buying program, they said.
Seizing the Fed concerns as an excuse, foreign banks operating in Taiwan stood on the sell side of the Taiwan dollar in exchange for the greenback, they added.
Interest in the U.S. dollar in the local foreign exchange market diminished later in the day, however, as the local market recouped its early losses on the back of foreign institutional buying, the dealers said.
Foreign institutional investors served as net buyers of NT$48.23 million (US$1.60 million)-worth of local shares Wednesday, when the weighted index on the Taiwan Stock Exchange closed up 0.04 percent at 7,824.54 points, off an early low of 7,761.76.
Despite the central bank's intervention, turnover remained thin, as many investors stayed on the sidelines, watching closely the escalation of political tension in the Middle East, the dealers said.
Fears over a possible U.S. military strike on Syria have sent ripples through the global financial markets, keeping worried currency traders at bay, they said.