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

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

The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.010 to close at NT$31.706 as concerns eased over an interest rate hike by the U.S. Federal Reserve, prompting traders to lower their U.S. currency holdings, dealers said.

However, the U.S. dollar losses were limited by foreign institutional selling in the local equity market, leading some traders to lock in their Taiwan dollar gains, dealers said.

The selling in the U.S. dollar ended a four-session rising streak against the Taiwan dollar.

The greenback opened at NT$31.700, and moved between NT$31.590 and NT$31.720 before the close. Turnover totaled US$739 million during the trading session.

Soon after the local foreign exchange market opened, the U.S. dollar came under pressure as currency traders began buying into the Taiwan dollar, based on comments by a voting member of the Fed, dealers said.

In a speech Monday, Fed Governor Lael Brainard said that although the U.S. economy has been improving, the Feb would be wise to maintain its monetary policy and should avoid raising interest rates too quickly.

Brainard's comments eased concerns over a rate hike by the Fed, prompting that currency traders here to start selling the greenback and picking up the Taiwan dollar, dealers said.

The U.S. dollar recovered somewhat from its early losses after the local equity market fell into negative territory due to foreign institutional selling, dealers said.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$7.27 billion (US$229 million) worth of shares on the main board Tuesday.

(By Frances Huang)
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Updated : 2021-04-13 01:18 GMT+08:00