US dollar dips to NT$30.323 in Taipei
March 7, 2014, 12:09 am TWN
TAIPEI, Taiwan -- The U.S. dollar fell against the Taiwan dollar Thursday, shedding NT$0.029 to close at NT$30.323 as traders moved their funds into regional currencies, including the local unit, after the United States reported disappointing economic data overnight, dealers said.
A move by the People's Bank of China (PBOC) to raise the reference rate of the yuan against the U.S. dollar, which boosted the Chinese yuan, added downward pressure on the greenback throughout the session, dealers said.
Strong foreign institutional buying in the local market also raised demand for the Taiwan dollar, prompting traders to cut their U.S. dollar holdings, dealers said.
However, the local central bank's intervened to prop up the U.S. dollar, helping the currency recoup most of its earlier losses by the close and slow down the pace of the Taiwan dollar's appreciation, they said.
The greenback opened at the day's high of NT$30.352, and moved to a low of NT$30.265 before rebounding. Turnover totaled US$584 million during the trading session.
The U.S. dollar opened flat but immediately fell into negative territory amid concerns over the U.S. economy after Washington reported disappointing job and service activity data.
According an ADP Research Institute report, U.S. companies hired an additional 139,000 workers in February, below an earlier market estimate of 155,000, while the non-manufacturing index of the Institute for Supply Management fell to 51.6 in February from 54 the previous month.
In the wake of the weak U.S. economic data, the South Korean won posted gains, giving an indication to traders here to pick up the Taiwan dollar, dealers said.
A higher reference rate of the yuan against the U.S. dollar led traders here to think that the PBOC would allow the Chinese currency to appreciate against the greenback, dealers said, adding that the yuan's appreciation is expected to lift other regional currencies.
In the local market, foreign institutional investors served as net buyers of NT$100 billion (US$3.30 billion) worth of local shares, in particular electronics stocks, paving the way for a rising Taiwan dollar.
Late in the session, the local central bank stepped in to push the U.S. dollar back to the NT$30.30 mark, which was a hint that it would try to keep the greenback above that level in the short term.