Greenback slips to NT$30.332 on Taipei forex as US economy forecasts cool
February 20, 2014, 12:20 am TWN
TAIPEI, Taiwan -- The U.S. dollar fell against the Taiwan dollar Wednesday, shedding NT$0.007 to close at NT$30.332 on the back of the strength of the Japanese yen, dealers said.
Foreign institutional buying in the local stock market also boosted demand for the Taiwan dollar and kept pressure on the greenback throughout the session, they said.
Taiwan's central bank entered the trading floor late in the session, as it has done regularly in recent months, to prop up the U.S. dollar and keep the pace of the Taiwan dollar's appreciation in check, they added.
The greenback opened at NT$30.350, and moved between NT$30.215 and NT$30.359 before the close. Turnover totaled US$575 million during the trading session.
The U.S. dollar steamed ahead on follow-through buying from a session earlier soon after the local foreign exchange market opened, but that momentum quickly faded as traders moved to the sell side in reaction to a rising yen, dealers said.
The yen staged a technical rebound after plunging a day earlier as traders dumped the U.S. dollar on concerns over the U.S. economy resulting from a disappointing manufacturing report.
The Fed Bank of New York's Empire State manufacturing index, released Tuesday in the U.S., fell to 4.48 in February from January's 12.51, potentially indicating a softening economic recovery.
With doubts hovering over U.S. economic fundamentals, the yen rose against the greenback, prompting traders in Taipei to also dump the U.S. dollar and increase their holdings of the Taiwan dollar, they said.
The U.S. dollar also encountered downward pressure from Taiwan's stock market, as foreign institutional investors pushed up demand for the local currency by buying a net NT$7.74 billion (US$255 million) in shares on the Taiwan stock exchange, dealers said.