The U.S. dollar rose against the Taiwan dollar on Friday, gaining NT$0.142 to close at NT$32.010, the highest level since July 27, when the U.S. currency ended at NT$32.068.
The strong gains posted by the U.S. dollar reflected further outflows of foreign funds from the region after expectations of an interest rate hike by the U.S. Federal Reserve were raised by the congressional testimony of Fed Chair Janet Yellen on Thursday U.S. time, dealers said.
Further foreign institutional selling of local equities increased downward pressure on the Taiwan dollar and helped the U.S. dollar to close up for the second consecutive session on Friday, they said.
The greenback opened at NT$32.000, and moved between NT$31.920 and NT$32.030 before the close. Turnover totaled US$1.167 billion during the trading session.
Soon after the local foreign exchange opened, the U.S. dollar received a significant boost against the Taiwan dollar, with local traders motivated by the outflow of foreign investor funds, as they bet on a stronger greenback, dealers said.
Hopes of a rate hike by the Fed were highlighted by Yellen’s remarks that a move to raise interest rates could be “appropriate relatively soon.” She said that the central bank had to be careful not to wait too long because that could force it to move too quickly in the future.
Other regional currencies such as the South Korean won, which the Taiwan dollar tracks closely, also moved lower against the U.S. dollar in the wake of foreign fund movements, which encouraged local traders to dump more Taiwan dollars, dealers said.
Local traders took their cue from further foreign institutional selling of local equities to buy U.S. dollars, while the main board closed slightly higher on Friday.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$6.13 billion (US$192 million) worth of shares on the main board on Friday, while the weighted index closed up 0.15 percent.
Source: Focus Taiwan News Channel