U.S. dollar dips below NT$29 level on Taipei forex market

Taipei,  The U.S. dollar moved lower against the Taiwan dollar Tuesday to end below the NT$29 level on continued large foreign fund inflow, dealers said.

The U.S. dollar closed down NT$0.060 to end at NT$28.960 after moving between NT$28.710 and NT$29.000. The closing level of the greenback was the lowest since Sept. 1, 2011, when the U.S. currency also closed at NT$28.960 against the Taiwan dollar.

It was the fifth consecutive session in which the American unit trended lower against the Taiwan dollar and the first time the greenback had dipped below the NT$29 mark in nine years.

Soon after the local forex market opened, the U.S. dollar faced tremendous downward pressure against the Taiwan dollar as currency traders took their cues from a strong showing made by the local equity market, which got a boost from a U.S. rally in the wake of President Donald Trump’s return to the White House from the hospital after being treated for COVID-19, the dealers said.

The sell-off in the U.S. dollar escalated as foreign investors continued to move their funds into the region, which also boosted the South Korean won, which the Taiwan dollar closely follows, imposing additional pressure on the U.S. unit and plunging the currency by NT$0.310, or 1.07 percent, at one point, the dealers added.

Although the central bank jumped into the market in the late trading session, as it had done in recent sessions, to prop up the U.S. dollar, the latest closing level showed that the central bank did not sustain its efforts to push the greenback back up to NT$29, a level the bank had long wanted to maintain, the dealers said.

The NT$29 level had been said to be the bottom line for Central Bank Governor Yang Chin-long (楊金龍). Since Yang took office on Feb. 26, 2018, the U.S. dollar had never fallen below that level on the back of the central bank’s efforts.

The dealers said Taiwan has been doing better than most in fighting the COVID-19 pandemic to support its economy, making foreign investors keen to move their funds into the country.

They added that it is possible the U.S. dollar will fluctuate between NT$28.70 and NT$28.90 in the short term on further fund inflows.

 

Source: Focus Taiwan News Channel

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