US dollar up to NT$30.236 on Taipei forex ahead of holiday
January 16, 2014, 12:10 am TWN
TAIPEI--The U.S. dollar rose against the New Taiwan dollar Wednesday, gaining NT$0.077 to close at the day's high of NT$30.236, as the local central bank intervened to help the greenback reverse its earlier losses, dealers said.
Support from the central bank for the U.S. dollar in a bid to boost Taiwan's global competitiveness cushioned the impact of selling by local exporters, who needed the New Taiwan dollar to meet fund demand ahead of the Chinese New Year holiday, dealers said.
The central bank's presence also offset demand for the New Taiwan dollar, which was partly boosted by the gains on the local market, driven by foreign institutional buying, dealers said.
The greenback opened at NT$30.165, and moved to a low of NT$30.060 before rebounding. Turnover totaled US$783 million during the trading session.
The U.S. dollar maintained its momentum from the previous session, opening higher, but it weakened as traders took cues from strong demand for the New Taiwan dollar among local exporters, dealers said.
Demand for the New Taiwan dollar among local exporters is expected to remain strong over the next few sessions as the Chinese New Year holiday is approaching. The holiday is scheduled to start Jan. 30.
Before the central bank's intervention, foreign institutional buying in local shares also added downward pressure on the U.S. dollar, encouraged by Wall Street's strong comeback, dealers said.
The weighted index on the Taiwan Stock Exchange closed up 0.63 percent at 8,602.55 points, after foreign institutional investors bought NT$7.65 billion (US$253 million) net worth of local shares.
Market sentiment remained cautious as traders were anxiously waiting for the Beige Book business survey, which was scheduled to be released by the U.S. Federal Reserve later in the day. The survey is expected to provide some clues on the Fed's plans for further scaling back of its monthly bond-buying program, dealers said.