US dollar rises to NT$29.842 Taipei forex
CNATAIPEI -- The U.S. dollar rose against the New Taiwan dollar Friday, gaining NT$0.059 to close at the day's high of NT$29.842 as the local central bank intervened in the late session to help the greenback reverse its earlier losses, dealers said.
September 14, 2013, 12:01 am TWN
Despite the central bank's presence, turnover in the local foreign exchange market remained thin as many traders stayed on the sidelines amid uncertainty over the U.S. Federal Reserve's next move about its monetary policy, they said.
The greenback opened at NT$29.780, and moved between NT$29.650 and NT$29.842 before the close. Turnover totaled US$498 million during the trading session.
Ahead of the central bank's intervention, the U.S. dollar continued its weakness as local exporters stood on the sell side to place downward pressure on the currency against the Taiwan dollar, dealers said.
Foreign institutional buying in the local market also played a role to boost demand for the Taiwan dollar, prompting traders to dump the U.S. dollar in exchange for the local currency, they said.
At the close of the local market, foreign institutional investors served as net buyers of NT$3.45 billion (US$115.6 million) worth of local shares as foreign funds kept entering Taiwan.
A weaker South Korean won, which fell back from its strength seen earlier in the day, let some air out of the Taiwan dollar, but traders remained upbeat about the economic growth in the region with expectations of more foreign funds, dealers said.
As it has done in recent sessions, the central bank stepped in to cap the Taiwan dollar's upside amid fears that the currency's strength will hurt Taiwan's exports at a time when the local economy needs a boost from higher outbound sales, they said.
Trading volume fell at the end of the session as traders preferred to stand idle before the Fed holds the next policymaking meeting on Sept. 17-18, dealers said, adding the market has been wary of whether and how the U.S. central bank will scale back its monthly US$85 billion bond buying program.