TAIPEI — The U.S. dollar extended its losses against the New Taiwan dollar Friday from the previous session, falling NT$0.021 to close at NT$30.245, as demand for the local currency continued to grow ahead of the Lunar New Year holiday, dealers said.
Although the euro and other currencies in the region weakened against the greenback, the Taiwan dollar was supported by demand from exporters who dumped the U.S. dollar and bought into the local currency to fulfill their annual financial obligations such as providing year-end bonuses to their employees, the dealers said.
The U.S. unit opened at NT$30.290 and moved between NT$30.180 and NT$30.299 before the close. Turnover totaled US$638 million during the trading session.
The dealers said the Taiwan dollar appeared stronger against the U.S. dollar right after the local foreign exchange market opened as exporters scrambled to seek funds and pushed the turnover higher.
The local currency defied the continued weakness of the euro, which was impacted by rising government bond yields in France and Italy, they said, adding that the market feared the two countries will face higher borrowing costs in their bond auctions scheduled for next week.
In addition, the euro fell to a 15-month low against the U.S. dollar overnight as concerns over the debt crisis in Europe were increased by the possibility that Hungary will seek a bailout after its currency encountered a plunge.
Following the downturn of the euro, currencies in Asia, including the Chinese yuan and the South Korean won, also moved lower against the U.S. dollar but failed to stop the Taiwan dollar’s upward trend, the dealers said.
Despite the gains posted by the Taiwan dollar, trading volume remained moderate as sentiment remained cautious ahead of the U.S. December non-farm payroll data due for release later in the day, they said.