US dollar ends lower on Taipei forex
CNATAIPEI -- The U.S. dollar fell against the Taiwan dollar Friday, shedding NT$0.085 to close at NT$29.900 as foreign investors kept moving funds into Taiwan, picking up bargains in the local market, dealers said.
September 7, 2013, 12:03 am TWN
The losses suffered by the greenback were capped by local central bank intervention aimed at slowing the pace of the Taiwan dollar's appreciation and strengthening the country's global competitiveness, the dealers said.
Despite the central bank's buying, turnover in the local foreign exchange market remained thin as many traders stayed on the sidelines, waiting for the August U.S. non-farm payroll data due later in the day, they added.
The greenback opened at the day's high of NT$29.985 and moved to a low of NT$29.755 before rebounding. Turnover totaled US$571 million during the trading session.
Before the central bank's intervention, the U.S. dollar continued its weakness soon after the local foreign exchange market opened on the back of further fund inflows, the dealers said.
While moving funds into Taiwan, foreign institutional investors continued to buy in the local market, serving as net buyers of NT$7.93 billion (US$247 million)-worth of local shares.
A pullback of the greenback against the Japanese yen and the South Korean won in the regional markets also gave traders here a strong hint to cut their U.S. dollar holdings in exchange for the Taiwan dollar, the dealers said.
In the late afternoon session, the central bank stepped in, helping the U.S. dollar recover most of its earlier losses, but with many traders sidelined, trading volume fell from a session earlier ahead of the release of the U.S. employment report, they said.
As the Fed has scheduled its next policymaking meeting for Sept. 17-18, the market believes the August employment report will serve as one of the biggest indicators for the Fed to map out its policy after its current monthly US$85 billion bond-buying program, the dealers said.
Market sentiment has turned more cautious as traders witnessed the U.S. government 10-year government bond yield moving closer to 3 percent overnight, a high the market has not seen since July 2011, they said.
The rising bond yield showed market fears that the Fed will start to tighten the money supply and even raise interest rates, they added.