U.S. dollar closes higher on Taipei forex market (update)

Taipei, The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.153 to close at NT$29.758 as foreign investors continued to move funds out of the country, dealers said.

The weakness of other regional currencies and foreign institutional selling in local equities added downward pressure on the Taiwan dollar and gave an additional boost to the U.S. dollar, they said.

The U.S. dollar closed at the highest level since Dec. 21, 2017, when it ended at NT$29.848 against the Taiwan dollar.

The greenback opened at NT$29.670, and moved between NT$29.660 and NT$29.785 before the close. Turnover totaled US$1.013 billion during the trading session.

Soon after the local foreign exchange market opened, the U.S. dollar gained momentum and buying accelerated as traders here took cues from the losses suffered by other regional currencies, dealers said.

The currencies in the region moved lower in reflection of a stronger U.S. dollar index, which tracks the currencies of Washington's six major trading partners, as it rose to the highest level in four months, dealers said.

The higher U.S. dollar prompted foreign investors to move their funds into U.S. dollar denominated assets, which placed downward pressure on the regional currencies, including the Taiwan dollar, dealers said.

In addition, a weaker local equity market caused by massive foreign institutional selling also pushed up the U.S. dollar against the Taiwan dollar throughout the session, dealers added.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$6.06 billion (US$204 million) worth of equities on the main board Wednesday, sending the weighted index down 0.37 percent at the close.

The greenback is likely to gather more steam against the Taiwan dollar down the road, in anticipation of a faster pace of interest rate hikes in the U.S., dealers said.

Source: Focus Taiwan News Channel