TAIPEI — The U.S. dollar fell against the New Taiwan dollar Tuesday, shedding NT$0.014 to close at NT$29.801 as the local currency staged a technical rebound from a more-than-six-month low seen a session earlier, dealers said.
The gains posted by the Taiwan dollar were capped by further central bank intervention to prop up the greenback and slow down the pace of the local unit’s appreciation in a bid to protect local exports, the dealers said.
Despite the central bank’s presence, turnover remained moderate as traders remained cautious about the debt problems in the eurozone after banking woes erupted in Cyprus, they added.
The greenback opened at the day’s high of NT$29.820 and moved to the day’s low of NT$29.680 before rebounding. Turnover totaled US$552 million during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar on follow-through buying from a day earlier, but profit taking quickly followed to drag down the U.S. unit, the dealers said.
Local exporters served as the major buyers of the New Taiwan dollar, taking advantage of the losses suffered by the local currency to lock in a favorable exchange rate, they said. The New Taiwan dollar closed at NT$29.810 against the U.S. dollar the previous day, the lowest level since Sept. 7, when the unit ended at NT$29.842.
The New Taiwan dollar’s rebound was in line with its counterparts in the region, such as the South Korea won and the Thai baht, which were hammered by renewed concerns over the debt crisis in the eurozone, the dealers said.
The central bank made its presence felt in the late trading session, as it has done in recent months, to help the greenback recoup part of its earlier losses at the end of the session, they said.
In addition to the central bank’s intervention, further foreign institutional selling in the local bourse let some air out of the New Taiwan dollar throughout the session, they added.
Foreign institutional investors served as net sellers of NT$6.76 billion (US$227 million)-worth of local shares.
A weakening euro kept market sentiment cautious about the debt problems in the eurozone as many traders retreated from the trading floor, watching closely to see how the banking difficulties in Cyprus will evolve, the dealers said.