NT dollar down on weak sentiment

By Sandra Chuang, The China Post

The NT dollar yesterday closed weaker, undermined by latest surveys by foreign banks that the local currency will maintain its weak position in the near future. The exchange rate against the greenback fell NT$0.022 to close at NT$34.065 amid a daily turnover of US$379 million. The exchange rate stood at NT$34.037 to the U.S. dollar when the market opened. It rose to the daily high of NT$33.94 but quickly retreated in response to the expected local currency’s further depreciation, as indicated by several foreign banks.

“Foreign banks’ negative comments about currency weakened the market,” said a dealer,”some even predicted that the NT dollar will fall to test NT$35 in the short term.”

The greenback buying by overseas traders emerged as session progressed, dragged the currency down to the daily low of NT$34.09 in the early trade. However, small amounts of NT dollar buying by foreign shareholders and the Central Bank of China bolstered the local currency which ranged around NT$34 for the rest of the session.

“I think range bound fluctuation between 34 and 34.3 is likely to follow in the near term,” said a market observer. “The market was waiting to see if the government would prop up the currency by any positive news,” he added.