US dollar gains NT$0.014 to NT$30.216 on Taipei forex
May 22, 2014, 12:03 am TWN
TAIPEI, Taiwan -- The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.014 to close at the day's high of NT$30.216 on thin trading amid caution toward the political tension in Thailand, where the Thai baht fell sharply due to a declaration of martial law there, dealers said.
The low trading volume made it easier for the local central bank to intervene, helping the U.S. dollar recoup its earlier losses at the close, the dealers said.
The greenback opened at NT$30.202 and moved to a low of NT$30.142 before rebounding. Turnover totaled US$477 million during the trading session.
The U.S. dollar opened flat but fell into the red immediately as traders took cues from the strength of the Japanese yen, which gained steam after the Bank of Japan (BOJ) refrained from further loosening its monetary policy, the dealers said.
The BOJ's move prompted traders here to think that the yen will continue to trend higher, a development that could lend support to other regional currencies, including the Taiwan dollar, they said.
The earlier gains posted by the local market placed further downward pressure on the U.S. dollar during the most of the session, but profit taking in local shares in the latter part of the session let some air out of the Taiwan dollar afterwards, the dealers said.
The weighted index on the Taiwan Stock Exchange closed down 0.28 percent at 8,862.42 points off an early high of 8,905.04, after foreign institutional investors served as net sellers of NT$858 million (US$28.40 million)-worth of local shares.
Many Taiwanese exporters stood on the sell side to cut their U.S. dollar holdings in exchange for the Taiwan dollar, but some foreign banks stayed on the sidelines, closely watching the political conditions in Thailand, which kept the daily trading volume from expanding, the dealers said.
In addition, the local central bank was also closely monitoring the baht's fluctuations amid fears that further volatility will destabilize the Taiwan dollar, they said.
In late-session trading, the central bank made its presence felt to vault the U.S. dollar back to NT$30.20, a level the bank believed was necessary to be maintained in the short term in a bid to boost Taiwan's global competitiveness, the dealers said.