TAIPEI–The U.S. dollar rose against the New Taiwan dollar Wednesday, gaining NT$0.042 to close at NT$30.682 on moderate turnover as many traders here stayed on the sidelines awaiting the release of the minutes of the U.S. Federal Reserve’s last policymaking meeting, dealers said.
The local central bank jumped onto the trading floor, as it has done almost every session recently, to prop up the U.S. dollar, helping recoup all of its earlier losses and close above the previous close, the dealers said.
The greenback opened at NT$30.680 and moved between NT$30.476 and NT$30.690 before the close. Turnover totaled US$710 million during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar on follow-through buying from a session earlier, but soon dipped into negative territory on the back of foreign fund inflows, the dealers said.
The session appeared relatively quiet, as many currency traders stepped away from the market, watching closely to see what the April 28-29 Fed meeting minutes will reveal about the U.S. central bank’s intention on its monetary policy, they said.
In addition to the local central bank’s intervention, the strength of the greenback against other regional currencies offset the impact resulting from foreign fund inflows into the country, the dealers said.
The higher U.S. dollar against other regional currencies came after Washington reported a strong housing market report in which new housing starts totaled 1.135 million in April, hitting a seven-and-a-half year high.
A retreat in the local equity market also let some air out of the New Taiwan dollar throughout the session, the dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$1.91 billion (US$62.25 million)-worth of local shares on the main board, sending the weighted index down 0.32 percent at the close.
After witnessing the U.S. dollar falling below the NT$30.50 mark, the local central resumed buying in the greenback to push up the currency above that level in a bid to protect Taiwan’s exports, the dealers said.