U.S. dollar ends down on Taipei forex despite hopes from Fed's plan
CNATAIPEI -- The U.S. dollar fell against the Taiwan dollar Friday, shedding NT$0.03 to close at NT$29.502 as foreign investors continued to move funds into the region, boosting demand for the local currency, dealers said.
October 5, 2013, 12:01 am TWN
Foreign institutional buying in the local bourse also prompted traders here to dump their U.S. dollar holdings throughout the session in exchange for the Taiwan dollar, dealers said.
The U.S. dollar's losses were limited by the local central bank's intervention, which helped push the greenback up to NT$29.50 by the end of the session, they added. Nonetheless, the U.S. dollar finished at its lowest level since May 8, when it ended at NT$29.500.
The greenback opened at the day's high of NT$29.530 and moved to a low of NT$29.290 before rebounding. Turnover totaled US$819 million during the trading session.
The U.S. dollar opened higher on a mild technical rebound but selling followed, with traders taking cues from foreign fund inflows amid hopes that the U.S. Federal Reserve will continue its monthly US$85 billion bond buying program, dealers said.
The market was awash in liquidity on such hopes after a partial shutdown of the U.S. government on Tuesday, dealers said.
Worries over debt ceiling woes in Washington also led many traders to think that the Fed will decide to retain its stimulus measures, when it holds its policymaking meeting Oct. 29-30, dealers said.
Foreign institutional investors remained on the buy side, picking up a net NT$5.19 billion (US$176 million) worth of local shares, which led to higher demand for the Taiwan dollar, dealers said.
The local central bank stepped in late in the session, helping to vault the greenback back to the NT$29.50 level by the end trade, they said.
With the fund inflows expected to continue, the central bank is expected to keep propping up the U.S. dollar, but the unit is likely to close below NT$29.50 next week, they added.