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US dollar increases to NT$30.420 in Taipei as won stages rebound

TAIPEI -- The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.044 to close at NT$30.420 after the greenback recouped its earlier losses on the back of the local central bank's intervention, dealers said.

The central bank's buying into the U.S. dollar offset the impact from the strength of the South Korean won, which staged a technical rebound against the U.S. currency, they said.

The greenback opened at NT$30.520 and moved between NT$30.299 and NT$30.549 before the close. Turnover totaled US$1.03 billion during the trading session.

The U.S. dollar opened higher on cues from a plunge in the local equity market, which felt the pinch of the impact from weak global equity markets over the Lunar New Year holiday, during which the local bourse was closed, dealers said.

The weighted index of the Taiwan Stock Exchange closed down 2.34 percent at 8,264.48 points after foreign institutional investors sold a net NT$44.39 billion (US$1.47 billion) worth of local shares.

The initial buying in the U.S. dollar largely came from foreign banks operating in Taiwan, as they have widely expected the U.S. Federal Reserve to continue winding down its monthly bond buying program.

On Jan. 29, the Fed announced a second cut-back to quantitative easing by an additional US$10 billion.

However, the strength of the U.S. dollar was eroded later in the session as the Taiwan dollar moved higher after investors were influenced by the South Korean won's technical rebound, dealers said.

The won gained its footing for the consecutive trading session as concerns over further volatility in emerging economies' currencies abated to some extent, they said.

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