Greenback sheds NT$0.022, rises to NT$31.472 on forex


CNA

TAIPEI — The U.S. dollar rose against the New Taiwan dollar Friday, gaining NT$0.022 to close at NT$31.472 as traders reacted to the weakness of the Japanese yen by cutting their holdings in the local currency, dealers said.

Buying in the U.S. dollar also reflected a move by the People’s Bank of China (PBOC) to lower the Chinese yuan rate against the greenback, but that was somewhat offset by a technical rebound on Taiwan’s stock exchange that lent support to the New Taiwan dollar, they said.

The greenback opened at NT$31.450, and moved between NT$31.360 and NT$31.480 before the close. Turnover totaled US$813 million during the trading session.

The U.S. dollar opened flat and soon rose above its previous close against the New Taiwan dollar because of the continuing decline of the yen, which fell for the third straight session as the Bank of Japan sustained its easy money policy to boost the economy, dealers said.

The yen’s fall also came amid expectations that the U.S. dollar will keep moving higher as traders in the region anticipate that the U.S. Federal Reserve will start a rate hike cycle in mid-2015, they said.

Dealers said that there have been fears that a falling yen will intensify currency depreciation competition in the region, which prompted traders here to lower their New Taiwan dollar holdings.

In addition to the weaker yen, traders here heeded the PBOC’s cut in the yuan by about 0.02 percent and sold more of the New Taiwan dollar from their portfolios, they said.

The New Taiwan dollar did get some support, however, from foreign institutional buying in Taiwan’s stock market, boosting demand for the local currency, dealers said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$8.31 billion (US$264 million) in local shares on the main board to send the weighted index 1.36 percent higher at the close.