U.S. dollar closes lower on Taipei forex (update)

Taipei-The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.031 to close at NT$30.070 as traders here were motivated by foreign fund inflows into Taiwan to buy into the local currency, dealers said.

The strength of other regional currencies also gave a boost to the Taiwan dollar amid eased concerns over geopolitical tension, while foreign institutional selling let some air out of the local currency by the close, the dealers said.

The greenback opened at NT$30.080 and moved between NT$30.018 and NT$30.089 before the close. Turnover totaled US$752 million during the trading session.

Soon after the local foreign exchange market opened, the U.S. dollar faced downward pressure as foreign investors moved their funds into the region, including the Taiwan market, the dealers said.

The fund inflows reflected reduced concerns over the tension in the region caused by the latest nuclear bomb test by North Korea, which prompted traders to pick up regional currencies, including the South Korean won, which the Taiwan dollar tracks closely, they said.

A move by the People's Bank of China to raise the Chinese yuan's reference rate against the U.S. dollar also served as a strong indication to traders here to hold more Taiwan dollars throughout the session, the dealers said.

However, foreign institutional selling in local equities helped the U.S. dollar fend off some of the downward pressure, the dealers added. According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$315 million (US$10.48 million)-worth of shares on the main board at Tuesday's close.

Source: Focus Taiwan News Channel