US dollar closes higher on Taipei forex
January 17, 2014, 12:09 am TWN
TAIPEI--The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.02 to close at the day's high of NT$30.256 as the local central bank intervened, vaulting the greenback above the previous closing level at the end of the session, dealers said.
The central bank's intervention helped offset the impact of continued selling by local exporters who needed the Taiwan dollar to meet fund demands with the Lunar New Year holiday approaching, the dealers said.
Strong buying by foreign institutional investors in the local market, which boosted demand for the Taiwan dollar, also prompted the central bank to prop up the U.S. dollar, they added.
On the back of the central bank's support, the U.S. dollar ended higher against the Taiwan dollar for the third session in a row.
The greenback opened at NT$30.240, and moved to a low of NT$30.055 before rebounding. Turnover totaled US$700 million during the session.
The U.S. dollar opened higher as foreign banks operating in Taiwan took cues from the Beige Book business survey released by the U.S. Federal Reserve overnight, which said the U.S. economy continued to grow at a moderate pace in December, the dealers said.
The latest comments on the economy from the Fed sparked speculation that the U.S. central bank will further scale down its monthly bond-buying program, a move that could strengthen the U.S. dollar, they said.
Such speculation also placed downward pressure on other regional currencies such as the Japanese yen and the South Korean won. The weakness of these regional currencies gave a hint to local traders to buy into the U.S. dollar in the early morning session, they added.
However, selling in the U.S. dollar emerged immediately to push down the greenback into the red as local exporters entered the market to pocket the Taiwan dollar to meet the year-end fund demand, the dealers said, adding that local exporters' Taiwan dollar purchases could continue into the next few sessions.
Ahead of the central bank's intervention, foreign institutional investors served as net buyers of NT$4.72 billion (US$156 million)-worth of shares on the Taiwan Stock Exchange, further boosting demand for the local currency, the dealers said.