TAIPEI — The U.S. dollar rose against the Taiwan dollar yesterday, gaining NT$0.014 to close at NT$29.582, helped by intervention from Taiwan’s central bank late in the trading session, dealers said. Many traders remained on the sidelines, however, as the mixed performance of other currencies in the region gave few hints on the best trading strategies to follow in the local foreign exchange market, they said. The greenback opened at NT$29.620 and moved between NT$29.450 and NT$29.630 before the close. Turnover totaled US$589 million during the trading session. The U.S. dollar extended its losses against the Taiwan dollar right after the foreign exchange market opened, and selling in the U.S. unit escalated with the local bourse staging a rebound, dealers said.
Foreign institutional investors were net buyers of NT$5.75 billion (US$194 million) in shares Wednesday, focusing on high-tech and financial stocks, to push the benchmark weighted index above the 8,000-point mark. The U.S. dollar faced downward pressure for much of the session because of the rising stock market before the central bank stepped in and propped up the U.S. currency to prevent Taiwan’s currency from appreciating too much and hurting the country’s export competitiveness, dealers said.
Trading volume remained thin because many investors were reluctant to trade after witnessing other Asian currencies, especially the South Korea won, trending lower against the U.S. dollar, they said.
After the greenback fell below NT$29.50 against the Taiwan dollar, the willingness of traders to further dump the U.S. dollar was compromised by fears that the central bank would intervene, they added. Although market sentiment toward the eurozone debt situation improved to some extent after European finance ministers agreed on a bailout package to debt-ridden Greece, many traders still acted cautiously, believing the financial crisis is far from over, dealers said. Such worries are expected to lead the U.S. dollar to move in an arrow trading range against the Taiwan dollar over the next few sessions, they said.