TWD drops on possible QE adjustments
The China post news staffTAIPEI, Taiwan -- The New Taiwan dollar weakened yesterday, on devaluations of other Asian currencies after speculation the U.S. Federal Reserve will adjust its quantitative easing measures.
February 22, 2013, 4:53 pm TWN
At the end of the session, the local unit closed at NT$29.68 against the U.S. dollar, weakening NT$0.08 on trade volume of US$875 million at Taipei Forex Inc.
According to the minutes of the Fed's last meeting, officials there said that the Federal Reserve should adjust its move to purchase bonds with US$85 billion each month, in the process pumping large amounts of money into the financial system.
The news immediately led to an appreciation of the U.S. dollar, which then caused a devaluation of Asian currencies including the South Korean won and the Singapore dollar. The won had at one point weakened to 1,087 against the greenback.
Locally, the New Taiwan dollar gained earlier in the trade, opening at NT$29.705 and rising by as much as NT$0.1 to NT$29.5. Yet, with a retreat in local stocks and a buying spree for the U.S. dollar emerging later on, the local unit dropped and closed at NT$29.68, depreciating NT$0.08 from a day earlier.
The weighted stock index TAIEX yesterday closed down 71.64 to 7,957.46, on trade volume of NT$77.594 billion.
Foreign investors had a net purchase of NT$340 million, while investment trusts and securities firms had net sales of NT$1.011 billion and NT$231 million, respectively. In total, the three institutional investors had a net sale of NT$902 million.