US dollar falls to NT$29.425 on Taipei forex as Asian currencies hold strong
CNATAIPEI--The U.S. dollar fell against the New Taiwan dollar Wednesday, shedding NT$0.041 to close at NT$29.425 in the wake of strong currencies in the region, prompting traders to buy into the local currency, dealers said.
October 24, 2013, 12:07 am TWN
Interest in regional currencies was spurred by expectation that the U.S. Federal Reserve will not slow down its stimulus measures anytime soon after Washington reported worse-than-expected nonfarm payroll data for September, they said.
Foreign institutional buying in the local market added downward pressure on the U.S. dollar ahead of the local central bank's intervention to prop up the greenback, they added.
The greenback opened at the NT$29.460, and moved between NT$29.330 and NT$29.469 before the close. Turnover totaled US$861 million during the trading session.
The U.S. dollar continued its downturn soon after the local foreign exchange opened, and selling increased as traders witnessed other regional currencies gaining on the Fed stimulus measure hopes, dealers said.
Many traders at home and abroad expect the Fed will not announce an exit from its monthly US$85 billion bond-buying scheme at an upcoming policymaking meeting scheduled for Oct. 29-30, they said.
Lower-than-expected hiring rates in September indicate economic recovery remains slow in the U.S., meaning the Fed is more likely to continue further fund injections, dealers said.
As long as the Fed continues to pump funds into the market, foreign investors are likely to keep moving money into the region and thereby boost the value of regional currencies, they said.
In addition, foreign institutional investors served as net buyers of NT$2.82 billion (US$95.84 million) worth of local shares to further raise demand for the New Taiwan dollar.
As the market has widely expected, the local central bank stepped in once again, to prop up the U.S. dollar in a bid to help Taiwan's exporters, dealers said.