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

The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.083 to close at NT$31.367 on more fund inflow, as traders were betting on a higher local currency due to hopes of no immediate interest rate hike by the U.S. Federal Reserve, dealers said.

More foreign institutional buying in the local equity market added downward pressure on the U.S. dollar before the currency recouped some of its earlier losses by the close, the dealers said.

The U.S. dollar closed lower against the Taiwan dollar for the fourth consecutive session to a new low since Sept. 8, when the U.S. unit ended at NT$31.286.

The greenback opened at the day's high of NT$31.489 and moved to a low of NT$31.308 before rebounding. Turnover totaled US$765 million during the trading session.

As soon as the local foreign exchange market opened, the U.S. dollar staged a mild rebound from a slump seen a session earlier, but soon fell into negative territory on fund inflows, the dealers said.

Currency traders continued to cut their holdings in the U.S. dollar on expectations that the Fed will not raise its key interest rates in its two-day policymaking meeting, set to start later in the day, they said.

Foreign institutional buying in equities lent more support to the Taiwan dollar Tuesday, although the buying was well below the level of the previous session, the dealers said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$930 million (US$29.65 million)-worth of shares on the main board Tuesday after a net buy of NT$11.12 billion seen the previous day.

The losses suffered by the U.S. dollar were capped by the end of the session after Taiwanese importers started to buy into the greenback for payment for their overseas purchases, the dealers said.

Source: Focus Taiwan News Channel