TAIPEI — The U.S. dollar rose against the Taiwan dollar yesterday, gaining NT$0.1 to close at NT$29.635 as traders took cues from a falling euro to dump the local currency, dealers said.
The selling in the Taiwan dollar reflected rising worries over the debt problems in the eurozone after the finance ministers in the region postponed a Feb. 15 meeting to Feb. 20 to decide on a bailout package for debt ridden Greece, they said.
A plunge in the local bourse added downward pressure on the Taiwan dollar, prompting traders to raise their U.S. dollar holdings during the trading session, they added.
The greenback opened at NT$29.620 and moved between NT$29.546 and NT$29.635 before the close. Turnover totaled US$816 million during the trading session.
Dealers said the delayed meeting has stirred up fears that once Greece cannot obtain a new round of bailout money, it will face a default and send ripples through the global financial markets.
The euro fell to a three-week low against the U.S. dollar due to the Greece fears, while many traders also preferred to unload the European common currency before another meeting planned by the leaders in Germany and Italy, they said.
Following the step of the euro, most of the currencies in Asia trended lower right after the regional foreign exchange markets opened, they added.
In the local foreign exchange market, the Taiwan dollar also faced pressure from a steep pullback in share prices due to a major correction from a rally seen a session earlier, dealers said.
The benchmark weighted index closed down 1.69 percent at 7,869.70 points, while foreign institutional investors shifted to the sell side by serving as net sellers of NT$1.3 billion worth of shares on the Taiwan Stock Exchange.
Dealers said the local central bank was believed to step in to buy into the U.S. dollar, in particular in late trade, and give a further boost to the greenback against the Taiwan dollar in a bid to protect Taiwan’s global competitiveness.