US dollar rounds out day higher on Taipei forex over KMT woes
CNATAIPEI--The U.S. dollar rose against the Taiwan dollar yesterday, gaining NT$0.068 to close at the day's high of NT$29.828 amid concerns over the political woes in the ruling Kuomintang (KMT), dealers said.
September 12, 2013, 12:12 am TWN
The weakness of the South Korean won in the regional market also gave traders a clear hint to cut their Taiwan dollar holdings in exchange for the U.S. dollar throughout the session, the dealers said.
The gains posted by the greenback, however, were capped, as foreign institutional investors kept buying into the local market to boost demand for the Taiwan dollar, they added.
The greenback opened at NT$29.760 and moved between NT$29.691 and NT$29.828 before the close. Turnover totaled US$792 million during the trading session.
Market sentiment toward the Taiwan dollar turned more cautious even before the KMT held a disciplinary meeting yesterday morning to discuss punitive action for Legislative Yuan Speaker Wang Jin-pyng, who stands accused of influence peddling, the dealers said.
The local currency was stuck in ranged trade and even turned weaker after the KMT decided to revoke Wang's party membership, which renders him ineligible to hold the top legislative post, they said.
Traders fear that Wang's case will create more chaos in the Legislative Yuan, which could send ripples through local politics and further destabilize the political situation, they added.
A weaker won added downward pressure on the Taiwan dollar after the Korean currency broke a three-session winning streak on speculation that the authorities in Seoul will intervene to slow down the pace of the won's appreciation, the dealers said.
Foreign banks operating in Taiwan shifted to the sell side to dump their Taiwan dollar holdings as they used the won's movement and the domestic political uncertainty as a reason to trade, they said.
Meanwhile, foreign institutional investors served as net buyers of NT$9.08 billion (US$304 million)-worth of local shares, which helped the Taiwan dollar fend off some of the downward pressure, the dealers said.