US dollar slides to NT$30.375 in Taipei as foreign investment rises
April 3, 2014, 12:00 am TWN
TAIPEI, Taiwan -- The U.S. dollar fell against the Taiwan dollar Wednesday, shedding NT$0.06 to close at NT$30.375 as foreign investors continued to move funds into Taiwan, dealers said.
Spurt by strong performance of stock market and Korean won, the currency value of Taiwan dollar has been trending up for the eighth day as of yesterday, accumulating gains of 0.91 percent.
Foreign funds also entered other markets in the region to push up the South Korean won and other local currencies, further dragging down the value of the greenback, they said.
A stronger Chinese yuan raised pressure on the U.S. dollar after the People's Bank of China (PBOC) hiked the reference rate for the yuan against the greenback, dealers said.
With foreign institutional investors staying on the buy side in the local market, the U.S. dollar felt stronger downward pressure throughout the session, they said.
The greenback opened at the day's high of NT$30.435, and moved to a low of NT$30.255 before rebounding. Turnover totaled US$868 million during the trading session.
After it opened flat, the U.S. dollar immediately fell into the red as traders saw further fund inflows on expectations that the U.S. Federal Reserve will continue to maintain high liquidity, dealers said.
That led more and more traders to bet that regional currencies would further appreciate against the U.S. dollar as foreign investors were expected to move their funds into the region, they said.
Traders here took cues from the strength of the won to pick up the Taiwan dollar, while the PBOC's hike of the yuan reference rate, an increase of about 0.02 percent to 6.1493 yuan, also encouraged buying in the local currency, dealers said.
After Chinese authorities reported better-than-expected manufacturing activity for March, traders have turned more upbeat about the China economy and the region in general, paving the path for buying into the regional currencies, they said.
In Taiwan, foreign institutional investors served as net buyers of NT$9.36 billion (US$308 million) worth of local shares, which gave another boost to the Taiwan dollar, dealers said.
The local central bank jumped into the market as it has done recently to prop up the U.S. dollar and helped the currency recoup most of its earlier losses in a bid to slow down the pace of the Taiwan dollar's appreciation, they said.