US dollar closes higher in Taipei at NT$29.455
CNATAIPEI -- The U.S. dollar rose against the Taiwan dollar yesterday, gaining NT$0.003 to close at the day's high of NT$29.455 as central bank intervention helped the greenback recover its earlier losses toward the end of the session, dealers said.
October 26, 2013, 12:04 am TWN
As the U.S. dollar fluctuated in a narrow range throughout the session, it was not necessary for the central bank to try too hard to reverse the losses of the U.S. currency, the dealers said.
Turnover remained moderate as many traders retreated from the trading floor, waiting for U.S. consumer sentiment data due later in the day to get a better sense about when and how the Federal Reserve will scale down its massive bond-buying program, they added.
The greenback opened at NT$29.455 and moved to a low of NT$29.380 before rebounding. Turnover totaled US$600 million during the trading session.
The U.S. dollar continued its downturn after the local foreign exchange market opened as traders took cues from the strength of most other regional currencies to cut their greenback holdings in exchange for the Taiwan dollar, the dealers said.
The willingness to hold regional currencies, including the Taiwan dollar, grew amid optimism toward China's economy after HSBC Holding and Markit Economics released data a day earlier to show that the Purchasing Managers' Index for October there hit 50.9, the highest level in seven months, they said.
The latest manufacturing activity data further reinforced market confidence in China's economy, which grew 7.8 percent in the third quarter, improving from 7.7 percent in the first quarter and 7.5 percent in the second quarter.
However, the losses suffered by the U.S. dollar were limited by a pullback in the local bourse on foreign institutional selling, which capped demand for the Taiwan dollar, the dealers said.
Foreign institutional investors served as net sellers of NT$2.98 billion (US$101 million)-worth of local shares on the Taiwan Stock Exchange, where the weighted index closed down 0.79 percent at 8,346.62.
Trading remained quiet ahead of the release of the U.S. consumer sentiment index for October, the dealers said, adding that many traders at home and abroad are anticipating that the consumer sentiment index will fall from September so that the chance for the Fed to postpone an exit from its current round of fund injections is likely to increase.