US dollar ends lower at NT$29.983 on Taipei forex
CNATAIPEI -- The U.S. dollar fell against the Taiwan dollar Friday, shedding NT$0.029 to close at NT$29.983 as the local market's momentum continued to boost demand for the local currency, dealers said.
August 31, 2013, 12:03 am TWN
The local central bank jumped onto the trading floor in the latter part of the session as it has done in recent sessions, buying into the greenback in a bid to slow the pace of the Taiwan dollar's appreciation, the dealers said.
It was the first time the U.S. dollar had closed below the NT$30 mark since Aug. 12, when the currency closed at NT$29.980 against the Taiwan dollar.
The greenback opened at the day's high of NT$30.012 and moved to a low of NT$29.870 before rebounding. Turnover totaled US$704 million during the trading session.
The U.S. dollar kept losing steam soon after the local foreign exchange market opened as traders here witnessed a technical rebound in the local stock market, the dealers said.
Foreign institutional buying in the local market placed downward pressure on the U.S. dollar after traders bought a net NT$5.57 billion (US$186 million)-worth of local shares, in particular in large-cap electronics stocks, to push the weighted index up 1.31 percent at the end of the session.
Although the South Korean won stayed little changed against the U.S. dollar in the session, its rebound seen earlier in the week also gave traders an indication to buy into the Taiwan dollar, the dealers said.
The won's gains earlier in the week were based on hopes that its rising current account will boost the value of the currency. The market expects South Korea's current account to hit a high of about US$53 billion this year.
The local central bank's presence to prop up the U.S. dollar was a move that let some air out of the Taiwan dollar in a bid to make locally made goods cheaper in the global market, the dealers said.
Despite the central bank's intervention, turnover remained moderate as many traders remained wary of a possible exit by the U.S. Federal Reserve from its monthly US$85 billion bond-buying program, they said.
As the U.S. reported overnight a 2.5 percent increase in its gross domestic product for the second quarter, up from an initial estimate of 1.7 percent growth, many traders feared that the Fed will start to scale back its stimulus measures in September.