US dollar rises to NT$30.339 on Taipei forex
February 19, 2014, 12:13 am TWN
TAIPEI--The U.S. dollar rose against the Taiwan dollar Tuesday, gaining NT$0.054 to close at the day's high of NT$30.339 as investors were influenced by the weakness of other regional currencies, in particular a plunge in the Japanese yen, to sell the local unit, dealers said.
However, institutional buying in the local market offset the impact from the falling regional currencies to some extent, which lent some support to the Taiwan dollar and limited the gains posted by the U.S. dollar, the dealers said.
The greenback opened at NT$30.290 and moved to a low of NT$30.225 before rebounding. Turnover totaled US$633 million during the trading session.
The U.S. dollar opened slightly higher against the Taiwan dollar on a technical rebound from a session earlier, but immediately fell into negative territory due to selling by local exporters, the dealers said.
Momentum of the Taiwan dollar faded quickly as traders took cues from a dive of the yen after the Bank of Japan (BoJ) decided to leave its loose monetary policy unchanged by sticking to the current asset purchases, they said.
The yen fell further to 0.7 percent against the U.S. dollar at one point after the BoJ decided to extend a special lending program, scheduled to expire in March, for one more year, in a bid to boost the country's economy, the dealers said.
The BoJ's policy to stimulate the Japanese economy prompted traders in the region to trim their yen holdings, a move that served as an indication of the further weakness of other regional currencies, including the South Korean won and the Taiwan dollar, they said.
Foreign banks operating in Taiwan largely stood on the buy side for the U.S. dollar, betting that the greenback will appreciate further amid uncertainty over the economic recovery, they added.
A rising equity market in Taipei, however, let some air out of the U.S. dollar after foreign institutional investors bought a net NT$5.72 billion (US$189 million)-worth of local shares to boost demand for the Taiwan dollar, the dealers said.
On the back of the foreign buying, the weighted index on the Taiwan Stock Exchange closed up 0.43 percent at the day's high of 8,556.23 points.