US dollar up at NT$30.290 on Taipei forex
January 22, 2014, 12:13 am TWN
TAIPEI--The U.S. dollar rose against the Taiwan dollar Tuesday, gaining NT$0.034 to close at the day's high of NT$30.290 as the greenback recouped its earlier losses after the local central bank's intervention, dealers said.
The central bank's buying in the U.S. dollar offset the impact of local exporters' continued selling of the greenback for the Taiwan dollar in a bid to meet fund demand as the Lunar New Year holiday approaches, dealers said.
The greenback opened at NT$30.256 and moved to a low of NT$30.075 before rebounding. Turnover totaled US$771 million during the trading session.
The U.S. dollar opened flat but fell into negative territory soon after local exporters rushed to raise their Taiwan dollar holdings by selling the U.S. unit, a trend that continued almost throughout the entire session, dealers said.
The U.S. dollar is expected to face further downward pressure over the next few sessions as local exporters need large amounts of Taiwan dollar funds to meet demand, for payments such as bonuses, at the end of the lunar year, dealers said.
Before the central bank's intervention Tuesday, the strength of the Chinese yuan against the U.S. dollar also prompted traders here to dump the greenback on hopes that the Chinese currency will continue to appreciate, dealers said.
The expectations of a stronger yuan were driven by People's Bank of China increase of the reference rate for the yuan in exchange for the U.S. currency, which indicated that China will allow more flexibility for its currency to fluctuate and even appreciate, dealers said.