US dollar ends higher at NT$30.429 on Taipei forex amid cautiousness toward US economy
February 7, 2014, 12:01 am TWN
TAIPEI, Taiwan -- The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.009 to close at NT$30.429 after Taiwan's central bank intervened to vault the greenback into positive territory at the end of the session, dealers said.
The central bank's buying offset the impact on the U.S. dollar resulting from a technical rebound staged by the local bourse, which boosted demand for the Taiwan dollar, the dealers said.
The bank's presence became more visible after the U.S. dollar fell below the NT$30.30 level, with the bank expected to keep the currency weaker in a bid to boost Taiwan's global competitiveness, they added.
The greenback opened at NT$30.420 and moved between NT$30.259 and NT$30.449 before the close. Turnover totaled US$984 million during the trading session.
The U.S. dollar opened flat, but selling emerged to drag down the currency as traders witnessed shares on the Taiwan Stock Exchange bouncing back from a 2.34 percent plunge seen a day earlier, the dealers said.
Although foreign institutional investors had sold a large chunk of local shares in recent sessions, many of them still kept their funds in the local market, a move that was attributed to the strength of the Taiwan dollar, they said.
In addition to a rebound in the local bourse, the gains posted by other regional currencies such as the Japanese yen and the South Korean won against the U.S. dollar placed downward pressure on the greenback, the dealers said.
The higher yen and won partly reflected eased fears over further volatility in the currencies in the emerging economies, as traders became somewhat calmer, they said.
Meanwhile, cautious sentiment toward the U.S. economy also drove the yen and won higher after the U.S. based payroll processor ADP reported lower-than-expected hiring in January, the dealers said.
Traders at home and abroad have been keeping a close eye on the U.S. January non-farm payroll data due out the following day for additional clues about the fundamentals of the world's largest economy, they said.
The January job data could serve as one of the most important indicators of how the U.S. Federal Reserve will continue to scale back its monthly bond-buying program, they added.
On Jan. 29, the Fed announced a cut of an additional US$10 billon per month in its stimulus measures, bringing the monthly amount down to US$65 billion.