Greenback closes higher on Taipei forex
April 4, 2014, 12:10 am TWN
TAIPEI--The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.005 to close at NT$30.380 after the central bank continued its efforts to prop up the greenback in a bid to slow down the pace of the local currency's appreciation, dealers said.
The central bank's intervention stopped an eight-session rise of the Taiwan dollar at a time when the U.S. dollar became stronger in the regional market after a recent slump, the dealers said.
Turnover remained moderate as traders remained on the sidelines, waiting for U.S. non-farm payroll data due out the next day for more clues about what the U.S. Federal Reserve will do regarding its monetary policy, they added.
The greenback opened at NT$30.390 and moved between NT$30.260 and NT$30.399 before the close. Turnover totaled US$634 million during the trading session.
The U.S. dollar opened higher on a technical rebound as traders took cues from better-than-expected U.S. factory order data released overnight, but fell into negative territory as foreign investors continued to move funds into the local market, the dealers said.
Sitting on ample liquidity in the local market, foreign institutional investors served as net buyers of NT$7.24 billion (US$238 million)-worth of shares, a move that added downward pressure on the U.S. dollar, they said.
As it has done recently, the central bank jumped onto the trading floor in the late session, picking up the U.S. dollar to assuage the impact of the recent strength of the Taiwan dollar, the dealers said.
The central bank's presence had been widely expected to push up the U.S. dollar back to the NT$30.30 level at the close, at a time when the greenback was stronger against other regional currencies because of Washington's factory order report, they said.
Despite the central bank's buying, turnover in the local foreign exchange remained limited, as many traders appeared reluctant to trade before the U.S. released its March jobless rate, also due out the following day, the dealers said.
Traders were cautious about the Fed's next move after the U.S. central bank started winding down its monthly bond-buying program in January, they said.