US dollar rises to NT$29.970 on Taipei foreign exchange
August 30, 2014, 12:00 am TWN
TAIPEI -- The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.005 to close at the day's high of NT$29.970 as the greenback recouped its earlier losses on the back of local central bank intervention, dealers said.
The central bank's presence offset the impact from rising demand for the Taiwan dollar from local exporters to meet their funding needs as the month came to an end, while the central bank's buying also fended off selling in the U.S. dollar resulting from foreign institutional buying in the local bourse, the dealers said.
Although the U.S. dollar recovered from its early low, the currency still closed below the NT$30 mark. It was the third consecutive session for the U.S. dollar to end below that level.
The greenback opened at NT$29.970 and moved to a low of NT$29.877 before rebounding. Turnover totaled US$685 million during the trading session.
The U.S. dollar opened higher against the Taiwan dollar on a mild technical rebound from losses seen a day earlier, but traders soon shifted to the sell side to push the U.S. currency into the red after witnessing demand for the local currency rising from local exporters, the dealers said.
As Friday was the last business day of the month, local exporters rushed to raise their Taiwan dollar holdings in a bid to meet end-of-month fund demands, a move that boosted the value of the local currency, they said.
Foreign institutional buying in the local bourse added downward pressure on the U.S. dollar, the dealers, said. According to the Taiwan Stock Exchange, foreign institutional investors served as net buyers of NT$4.49 billion (US$150 million)-worth of local shares Friday.
After the U.S. dollar fell below NT$29.90 against the Taiwan dollar, the central bank's intervention appeared more visible, pushing the greenback back to that level at the close, the dealers said.
Despite the central bank's buying, turnover remained moderate as traders stayed on the sidelines amid rising fears over geopolitical tension related to the crisis in Ukraine.
Concerns over the Ukraine situation have been running deeper after news surfaced overnight that Russian forces were inside Ukraine to support pro-Kremlin separatists who have been fighting against the Kiev government.