US dollar recovers, ends high on Taipei forex
May 10, 2014, 12:00 am TWN
TAIPEI -- The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.008 to close at the day's high of NT$30.175 after moving in a narrow range on moderate trading volume, dealers said.
The local central bank took advantage of the small swing of the U.S. dollar to make its presence again by picking up the currency to help the unit recoup earlier losses and end above the previous close, they said.
The greenback opened at NT$30.165, and moved to a low of NT$30.085 before rebounding. Turnover totaled US$656 million during the trading session.
The U.S. dollar opened lower as traders took cues from the earlier strength of the South Korean won to cut their greenback holdings, betting that the regional economic recovery would remain on track in reflection of a wider trade surplus posted by Seoul in April, dealers said.
Although the won lost steam amid fears over the Korean government's intervention to drag down the currency's value, the Taiwan dollar maintained its strength on confidence in Taiwan's exports, particularly after the country reported 6.2 percent growth in outbound shipments in April, they said.
Selling in the U.S. dollar continued as traders expected that the U.S. Federal Reserve will continue its loose monetary policy after Fed Chair Janet Yellen said in a congressional testimony Wednesday that a "high degree of monetary policy accommodation remains warranted."
Ahead of the local central bank's intervention, a falling local bourse let some air out of the Taiwan dollar, lending some support to the U.S. dollar during the session, dealers said.
Foreign institutional investors served as net sellers of NT$5.65 billion (US$187 million) worth of local shares to push down the weighted index on the Taiwan Stock Exchange down 0.46 percent at the close.
In a bid to assuage the impact from the Taiwan dollar's appreciation, the local central bank stepped onto the trading floor, as it has done in almost every recent session, pushing the U.S. dollar back to above NT$30.10, dealers said, adding the level could be the central bank's bottom line in the short term.