Greenback declines to NT$30.165 on Taipei foreign exchange
May 8, 2014, 12:02 am TWN
TAIPEI--The U.S. dollar fell against the New Taiwan dollar Wednesday, shedding NT$0.011 to close at NT$30.165 as traders were encouraged by the strength of other regional currencies to sell the greenback in exchange for the local currency, dealers said.
The U.S. dollar, however, recouped most of its early losses after the local central bank entered the trading floor in a bid to slow down the pace of the New Taiwan dollar's appreciation, dealers said.
Despite the fluctuations, market sentiment remained cautious ahead of congressional testimony by U.S. Federal Reserve Chairwoman Janet Yellen later in the day, they added.
The greenback opened at the day's high of NT$30.175, and moved to a low of NT$30.080 before rebounding. Turnover totaled US$639 million during the trading session.
The U.S. dollar opened lower and selling accelerated, pushing down the currency further as traders here were aware of the gains posted by other regional currencies such as the South Korean won and the Chinese yuan and moved to raise their New Taiwan dollar holdings, dealers said.
The won rose to a six-year high against the U.S. dollar at one point on a technical rebound from recent losses amid optimism toward South Korea's economic recovery.
Meanwhile, the yuan hit a three-week high against the greenback at one point during the session after the People's Bank of China (PBOC) raised the reference rate for the yuan against the U.S. dollar, which led traders to think the PBOC will allow the currency to appreciate further.
Before the local central bank's intervention, a falling local bourse deflated the New Taiwan dollar as foreign institutional investors sold a net NT$3.82 billion (US$127 million) worth of shares, dealers said.
Turnover in the local foreign exchange market remained moderate as many traders stayed on the sidelines, waiting for Yellen to give some indication of the Fed's next move in its monetary policy, dealers added.