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

Taipei-The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.042 to close at NT$30.060 after foreign institutional investors bought aggressively into local equities, dealers said.

The strength of other regional currencies also placed pressure on the U.S. dollar, pushing down the currency to its lowest since Sept. 13, when the unit closed at NT$30.056 against the Taiwan dollar, they said.

The greenback opened at NT$30.090 and moved between NT$30.044 and NT$30.092 before the close. Turnover totaled US$584 million during the trading session.

Soon after the local foreign exchange market opened, the U.S. dollar faced selling in favor of the Taiwan dollar, and pressure on the greenback escalated as the local equity market made a strong comeback, led by the financial and electronics sectors, dealers said.

The equity market was driven by strong foreign institutional buying throughout the session, which paved the way for a higher Taiwan dollar and a weaker U.S. dollar, they said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$7.66 billion (US$255 million) worth of shares to pick up large cap stocks such as Cathay Financial Holding Co. (???) and contract chipmaker Taiwan Semiconductor Manufacturing Co. (???).

Meanwhile, buying in other regional currencies, including the South Korean won, also placed downward pressure on the U.S. dollar on local foreign exchange markets throughout the day, dealers said.

The won, which the Taiwan dollar follows closely, rose more than 0.40 percent against the U.S. dollar at one point, giving a clear indication to local traders to raise their holdings in the Taiwan dollar, pushing down the U.S. dollar further, dealers added.

Turnover on the local foreign exchange market remained moderate as many traders stayed on the sidelines, watching closely how the U.S. Federal Reserve approaches its interest rate hike cycle, dealers said.

Source: Focus Taiwan News Channel