US dollar closes at NT$30.066 on Taipei forex
August 9, 2014, 12:01 am TWN
TAIPEI -- The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.005 to close at NT$30.066 as the greenback recouped earlier losses to end in positive territory, dealers said.
On the back of buying by the local central bank, the U.S. dollar closed above the NT$30 mark for the 19th consecutive session in a bid to make the Taiwan dollar cheaper and give an edge to Taiwanese exporters in the global market, the dealers said.
The greenback opened at NT$30.062 and moved between NT$29.860 and NT$30.069 before the close. Turnover totaled US$741 million during the trading session.
After opening slightly higher on follow-through buying, the U.S. dollar soon fell into the red as the Taiwan dollar was boosted by the strength of the Chinese yuan, which moved higher after the People's Bank of China raised the yuan's reference rate, the dealers said.
The upgrade of the yuan's reference rate caused traders here to think that China will allow more room for its currency to move higher, a development that could lift other currencies in the region, they said.
The strength of the yuan, which rose 0.06 percent against the U.S. dollar, also reflected optimism toward China's economy after Beijing reported that its exports for July rose 14.5 percent from a year earlier, compared with 7.2 percent year-on-year growth seen in June, the dealers said.
Due to the strong export growth, China's trade surplus more than doubled over the previous year to US$47.3 billion, and the higher trade surplus could further boost the yuan and other regional currencies, including the Taiwan dollar, they said.
A stronger Japanese yen also gave traders an indication to pick the Taiwan dollar before the local central bank stepped in, the dealers said.
The central bank bought into the U.S. dollar again in the latter part of the trading session to vault the greenback back to NT$30, a level the bank wants to maintain, the dealers said, adding that as the South Korean won has been trending lower, the local central bank is expected to continue its intervention to cap the Taiwan dollar's gains.