US dollar rises to NT$30.437 in Taipei
March 20, 2014, 12:05 am TWN
TAIPEI--The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.051 to close at the day's high of NT$30.437 amid worries over the fate of a trade-in-services agreement with China, dealers said.
Concerns about the trade pact Taiwan and China signed in June 2013 have been running deeper after hundreds of protesters skeptical of the agreement stormed the Legislative Yuan and took over the chamber, forcing the Legislature to shut down, the dealers said.
A weakening Chinese yuan also gave an indication to traders here to cut their Taiwan dollar holdings in exchange for the U.S. dollar, while selling by foreign institutional investors in the local market added downward pressure on the local currency, they added.
The greenback opened at NT$30.385 and moved to a low of NT$30.275 before rebounding. Turnover totaled US$1.09 billion during the trading session.
The U.S. dollar opened lower on mild profit-taking, but soon regained its footing, as traders feared that the standoff at the Legislative Yuan will further delay the implementation of the service trade agreement with China, the dealers said.
The trade pact remains pending at the Legislative Yuan amid strong resistance from opposition parties who say the agreement will have an impact on the local job market.
Buying in the U.S. dollar came largely from foreign banks operating in Taiwan that have turned cautious about cross-strait business exchanges due to the dispute over the trade pact, the dealers said.
The weakness of the yuan, which fell to an almost one-year low against the U.S. dollar at one point, encouraged traders here to dump their Taiwan dollars, they said.
Foreign institutional investors served as net sellers of NT$1.06 billion (US$34.83 million)-worth of local shares on the Taiwan Stock Exchange, which further pushed down demand for the local currency, they added.
Market sentiment remained cautious before the U.S. Federal Reserve was set to conclude a two-day policymaking meeting later in the day in which the central bank was expected to announce a further cut in its monthly bond-buying program, the dealers said.