After early recovery, US dollar ends day lower on Taipei forex
CNATaipei--The U.S. dollar fell against the Taiwan dollar Wednesday, shedding NT$0.035 to close at NT$29.885 after the greenback recovered part of its earlier losses on the back of buying by the local central bank, dealers said.
September 5, 2013, 12:01 am TWN
The U.S. dollar weakened against the local currency throughout the session as foreign institutional investors continued to buy into the local market to boost the Taiwan dollar's value, the dealers said.
The greenback closed at a new low since July 19, when the currency finished at NT$29.878.
The U.S. dollar opened at NT$29.930 and moved between NT$29.755 and NT$29.939 before the close. Turnover totaled US$566 million during the trading session.
Before the central bank stepped in, the U.S. dollar came under heavy downward pressure as foreign investors kept moving their funds into the country from other regional markets to pick up local shares, the dealers said.
As Taiwan has a relatively stable economic climate on the back of large foreign exchange reserves, it has made itself an attractive destination for foreign investment, they said.
By the end of the session, foreign institutional investors had served as net buyers of NT$4.72 billion (US$158 million) worth of local shares to lift demand for the Taiwan dollar throughout the session.
However, the local central bank, which aimed to slow the pace of the Taiwan dollar's appreciation, started to buy into the U.S. dollar in the late session, as it had done in recent sessions, to push the greenback back above NT$29.80, the dealers said.
In addition to the central bank's intervention, a falling South Korean won also let some air out of the Taiwan dollar amid rising hopes that the U.S. Federal Reserve will start to scale back its monthly US$85 million bond-buying program in mid-September, the dealers said.