Jul 10, 2017 Government & Politics Comments Off on U.S. dollar closes lower on Taipei forex (update)
Taipei--The U.S. dollar fell against the Taiwan dollar Monday, shedding NT$0.025 to close at NT$30.585 after moving in a quiet session on moderate trading volume, dealers said.
Market sentiment remained cautious ahead of a congressional testimony planned by U.S. Federal Reserve Chair Janet Yellen later in the week, causing many traders to stay off the trading floor, the dealers said.
The U.S. dollar stopped a two-session rising streak as the Taiwan dollar staged a technical rebound on the back of the strength of other regional currencies, the dealers said.
The greenback opened at the day's low of NT$30.540 and moved to a high of NT$30.587 before the close. Turnover totaled US$572 million during the trading session.
Soon after the local foreign exchange market opened, the U.S. dollar moved lower as the Taiwan dollar bounced back from a session earlier in the wake of gains posted by other regional currencies, in particular the South Korean won, the dealers said.
However, selling in the U.S. dollar was capped, since the market has widely anticipated that the currency will appreciate against the Taiwan dollar, as the Fed is in a rate hike cycle, they said.
The losses suffered by the greenback were also limited by foreign institutional selling in the local equity market, the dealers said. According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$2.14 billion (US$69.97 million)-worth of shares on the main board Monday.
Turnover remained moderate, as many currency traders stayed on the sidelines, waiting to find out what Yellen will say in her congressional testimony, which could give more clues about how the U.S. central bank will adjust its monetary policy, the dealers said.
In addition to hopes of the Fed's tightening of its monetary policy, foreign institutional investors could move their funds back home after they receive cash dividends from local listed companies in the third quarter, which could give more pressure on the Taiwan dollar, the dealers added.
Source: Focus Taiwan News Channel