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US dollar rises to NT$30.386 in Taipei

TAIPEI, Taiwan -- The U.S. dollar rose against the Taiwan dollar Tuesday, gaining NT$0.034 to close at the day's high of NT$30.386 after a quiet session on thin turnover, dealers said.

After the PBOC doubled the trading band of the yuan to 2 percent March 15, the Chinese currency remained weak, which prompted traders to stay alert over the yuan's fluctuations in the near future, the dealers said.

Many traders retreated from the trading floor, watching closely the fluctuations of the Chinese yuan after the People's Bank of China (PBOC), China's central bank, widened the trading band for the currency, the dealers said.

Market sentiment toward the U.S. dollar's movement remained cautious ahead of a policymaking meeting scheduled by the U.S. Federal Reserve for March 18-19, the dealers said.

The local central bank entered the market, as it has done recently, to prop up the U.S. dollar, helping the currency reverse its earlier losses at the close, they said.

The greenback opened at NT$30.350 and moved to a low of NT$30.302 before rebounding. Turnover totaled US$425 million during the trading session.

The U.S. dollar opened lower on follow-through selling from a session earlier, and the downtrend continued as foreign institutional investors bought a net NT$3.98 billion (US$131 million)-worth of local shares to boost demand for the Taiwan dollar, the dealers said.

The local foreign exchange market appeared slow as many traders stayed on the sidelines, keeping a close eye on the yuan's movement, they said.

Trading interest in the local foreign exchange market was also hurt by caution about the next move the Fed will make in the upcoming policymaking meeting. The Fed started to cut its monthly bond-buying program in January.

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