Nick Land, The China Post
The NT dollar rose further against the greenback yesterday, with the exchange rate up to NT$34.786 from Wednesday’s NT$34.85. The Taiwan currency was strengthened by positive investment flows from overseas stock funds and by continued readjustments of forward positions among offshore money brokers.
As the local stock market index approached 4,000 points early this week it triggered a wave of bargain-hunting by foreign investment funds, leading to a rally in both Taiwan stocks and the NT dollar. Short-sellers in both stock and currency markets have been punished over the last few days, further supporting a recovery in values.
According to dealers, the Central Bank of China began intervening actively above the NT$34.8 level to moderate the NT dollar recovery. “For the time being, it looks like the CBC wants the NT dollar to stay below 34.750, but this will be somewhat influenced by the U.S. dollar/yen and economic factors,” said one dealer.
Trade volume increased to US$869.5 million, from US$354.0 million on Wednesday.