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

The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.130 to close at NT$31.589 amid worries that rising protectionism in the United States after Donald Trump’s election victory will impact exports by economies in the region, dealers said.

A move by the People’s Bank of China (PBOC) to lower the Chinese yuan’s reference rate against the U.S. dollar also hurt sentiment toward regional currencies, including the Taiwan dollar, the dealers said.

Continued foreign institutional selling in local shares gave an additional boost to the U.S. dollar and pushed the Taiwan dollar down further throughout the session, they added.

The greenback opened at NT$31.580 and moved between NT$31.500 and NT$31.620 before the close. Turnover totaled US$863 million during the trading session.

Soon after the local foreign exchange market opened, the U.S. dollar moved higher, as traders here took cues from the weakness of other regional currencies to cut their holdings in the Taiwan dollar, the dealers said.

A rising U.S. dollar in the regional market reflected concerns that Trump will implement protectionist trade policies as he vowed to do during his election campaign, and currency traders rushed to dump their regional currencies, which placed heavy downward pressure on the Taiwan dollar, they said.

The PBOC’s decision to lower the yuan’s reference rate against the greenback made currency traders more downbeat about the movement of the regional currencies, prompting traders here to dispose of their Taiwan dollars, the dealers said.

Although the local equity market staged a strong rebound, foreign institutional investors still stayed on the sell side, which sent the Taiwan dollar lower, they added.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$425 million (US$13.44 million)-worth of shares on the local main board Thursday, while the weighted index closed up 2.34 percent.

Source: Focus Taiwan News Channel

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