US dollar closes lower on Taipei forex for third consecutive session
January 18, 2014, 12:00 am TWN
TAIPEI -- The U.S. dollar fell against the Taiwan dollar for the third consecutive session Friday, shedding NT$0.035 to close at NT$30.221 as exporters sold the greenback in exchange for the local currency to meet fund demands with the Lunar New Year holiday approaching, dealers said.
The strength of the South Korean won and the Chinese yuan also put downward pressure on the U.S. dollar, while foreign institutional buying in the local market boosted demand for the Taiwan dollar, they said.
The local central bank jumped into the trading floor in the late session, as it has done recently, to slow down the pace of the Taiwan dollar's appreciation before trading closed, they added.
The greenback opened flat at NT$30.256 and moved between NT$30.050 and NT$30.260 before the close. Turnover totaled US$644 million during the trading session.
The U.S. dollar fell to negative territory immediately after opening as local exporters resumed buying in the Taiwan dollar ahead of the Lunar New Year holiday, dealers said.
Exporters' purchases of the Taiwan dollar are expected to continue before the holiday starts Jan. 30 to maintain the local currency's strength, which could stir up intervention from the central bank at a time when many local business leaders have urged a depreciation in the local unit, they said.
The U.S. dollar also faced selling sparked by a rise in South Korea's currency, which was bolstered by eased fears that the U.S. Federal Reserve will speed up the tapering of its bond-buying program after U.S. inflation in 2013 ended up lower than the Fed's target, dealers said.
A stronger yuan served as another indication for traders here to raise their Taiwan dollar holdings after the People's Bank of China raised the reference rate for the yuan in exchange for the U.S. dollar, they said.
Ahead of the local central bank's presence, foreign institutional investors bought a net NT$5.35 billion (US$177 million) worth of shares on the Taiwan Stock Exchange, a move which boosted selling in the U.S. dollar, they added.