TAIPEI, Taiwan — The U.S. dollar fell against the New Taiwan dollar Wednesday, shedding NT$0.146 to close at NT$31.156 as traders seized a strong rebound on the Taiwan Stock Exchange as a reason to raise their holdings in the local currency, dealers said.
The strength of other regional currencies also placed downward pressure on the U.S. dollar in the local foreign exchange market before Taiwan’s central bank stepped in, helping the U.S. unit to recoup some of its earlier losses, the dealers said.
The greenback opened at NT$31.310 and moved between NT$30.907 and NT$31.315 before the close. Turnover totaled US$761 million during the trading session.
The U.S. dollar opened higher against the New Taiwan dollar, but soon fell into negative territory due to strong buying in the local bourse on a technical rebound from a slump seen a session earlier, the dealers said.
The weighted index on the main board closed up 1.16 percent Wednesday, led by large-cap stocks across the board, recovering from a 1.88 percent fall seen a session earlier.
The gains in share prices boosted demand for the New Taiwan dollar, prompting currency traders to buy into the local currency throughout the session, the dealers said.
The Japanese yen rose 1.2 percent against the U.S. dollar at one point after Bank of Japan Governor Haruhiko Kuroda said it will be difficult for the country’s currency to fall further after a recent plunge against the greenback.
The yen’s rebound gave a strong hint to traders in other currencies in the region, including the New Taiwan dollar, to move higher against the U.S. dollar, the dealers said.
As it has done regularly in recent sessions, the local central bank jumped onto the trading floor in the latter part of the trading session in an attempt to lessen the impact on the U.S. dollar resulting from the gaining local bourse and a stronger yen, they said.