TAIPEI–The U.S. dollar rose against the New Taiwan dollar Monday, gaining NT$0.030 to close at the day’s high of NT$31.256 on moderate turnover amid cautious sentiment ahead of a two-day policy making meeting scheduled by the U.S. Federal Reserve to kick off a day later, dealers said.
The quiet trading session also reflected fears over the debt problems in Greece as negotiations on the debt-ridden country’s bailout program failed to yield any meaningful conclusion yet, the dealers said.
Taiwan’s central bank entered the market again to prop up the U.S. dollar, helping the currency to return to positive territory at the close in a bid to protect Taiwanese exporters, they added.
The greenback opened at NT$31.226 and moved to a low of NT$30.930 before rebounding. Turnover totaled US$667 million during the trading session.
The U.S. dollar opened flat against the New Taiwan dollar, but soon fell into the red as Taiwanese exporters cut their greenback positions by taking advantage of recent losses incurred by the local currency, the dealers said.
The New Taiwan dollar also staged a rebound after the local central bank intervened to drag down the local currency in the previous session, they said.
After the U.S. dollar fell below the NT$30 mark, the local central bank jumped onto the trading floor in the late session, as it has done in most recent sessions, to push up the greenback back to that level at the close, the dealers said.
Despite the central bank’s intervention, turnover in the local foreign exchange market failed to expand, with many traders staying on the sidelines to await for the results of the Fed’s upcoming meeting, the dealers said.
On Friday, a preliminary reading showed that the Michigan consumer sentiment stood at 94.6 for June, an increase from May’s final reading of 90.7, which raised fears that the Fed will raise its interest rates in September, they said.
The upcoming Fed meeting could give more hints through its statement on the economic climate on when an interest rate hike cycle will start, they added. Traders here have also been watching closely how the eurozone will deal with the debt problems in Greece to prevent the country from defaulting on its massive loans, the dealers said.