US dollar closes NT$30.065 on Taipei forex
June 21, 2014, 12:18 am TWN
TAIPEI -- The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.029 to close at the day's high of NT$30.065 after Taiwan's central bank intervened to reverse earlier losses by the greenback, dealers said.
Before the central bank's intervention, the U.S. dollar trended lower for most of the session on continued fund inflows into Taiwan after the U.S. Federal Reserve indicated it will keep interest rates low for some time, they said.
The greenback opened at NT$30.040, and moved to a low of NT$29.970 before rebounding. Turnover totaled US$694 million during the trading session.
The U.S. dollar opened higher on a mild technical rebound from the losses seen a session earlier, but soon fell into the red as traders saw foreign investors moving more funds into Taiwan's equity markets, dealers said.
Foreign funds also entered other markets in the region to push up regional currencies, such as the Japanese yen, which served as an indication to traders here to buy into the Taiwan dollar and dump the U.S. dollar, they said.
Fund inflows into the region are expected to continue on the back of the Fed's comments after its policymaking meeting that wrapped up Wednesday, dealers said.
The U.S. central bank said it will maintain low interest rates for a "considerable time" after it ends its monthly stimulus program, which brought relief to many traders in global markets who feel the U.S. central bank will not raise interest rates until 2015, they said.
A stronger Chinese yuan, which rose 0.02 percent against the U.S. dollar at one point, added downward pressure on the greenback in the local foreign exchange market after the People's Bank of China raised the yuan reference rate by 0.01 percent from a day earlier, dealers said.
As a result, the U.S. dollar fell below the NT$30 mark again during the session.
To stem the weakness of the greenback, Taiwan's central bank entered the trading floor late in the session in a bid to vault the U.S. currency back to the level the market believes the central bank wants to maintain in the short term, dealers said.