Taipei-The U.S. dollar fell against the Taiwan dollar, shedding NT$0.011 to close at NT$29.990 on the back of continued seasonal fund demand from Taiwanese exporters as the month comes to an end, dealers said.
The weakness of the U.S. dollar also reflected expectations that the U.S. Federal Reserve will continue its gradual rate hike policy, though additional foreign institutional selling in local equities lent some support to the U.S. currency, they said.
The U.S. dollar closed below the NT$30 mark for the first time since Sept. 4, 2014, when the currency ended at NT$29.972.
The greenback opened at the day's high of NT$30.010, and moved to a low of NT$29.973 before rebounding. Turnover totaled US$715 million during the session.
Soon after the local foreign exchange market opened, the U.S. dollar staged a mild technical rebound from losses posted in recent sessions, before selling emerged as currency traders here were motivated by end-of-month fund demand from local exporters to dispose of the U.S. unit, dealers said.
Traders also heeded the strength of other regional currencies and raised their holdings in the Taiwan dollar as they expect the Fed to continue its gradual increase in interest rates, dealers added.
Such expectations came after U.S. President Donald Trump nominated Jerome Powell, who is seen as dovish on monetary policy, to head the Fed, dealers said.
In addition, the South Korean won, which the Taiwan dollar tracks closely, moved 0.30 percent higher against the U.S. dollar, on hopes that the Bank of Korea will raise interest rates later in the week. A higher won gave an additional boost to the Taiwan dollar, dealers said.
However, the losses posted by the U.S. dollar were capped as foreign institutional investors continued to stand on the sell side in the local equity market, which failed to stage a meaningful rebound, dealers added.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$6.74 billion (US$225 million) worth of shares on the main board on Wednesday after net sales totaling NT$8.59 billion in the previous session.
Source: Focus Taiwan News Channel