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NT dollar firmer amid demand for bonus payouts

NT dollar firmer amid demand for bonus payouts

The New Taiwan dollar gained on speculation some exporters increased currency demand for bonus payouts to workers before the Lunar New Year holiday, which begins on January 29.

"There's a higher chance of the Taiwan dollar rising," said Pory Shih, a trader at Chang Hwa Commercial Bank in Taipei. "Exporters have been coming out to sell their U.S. dollars."

The New Taiwan dollar rose to NT$31.980 yesterday, according to Taipei Forex Inc.

Meanwhile, the U.S. dollar struck four-month lows against the euro and Swiss franc yesterday, undermined by expectations U.S. interest rates would not rise much further, while Asian shares staged a strong recovery from Monday's falls.

The dollar had moved off its lows by mid-afternoon in Tokyo, but remained under pressure. Traders linked the weakness to comments from Federal Reserve officials that reinforced expectations a series of U.S. rate rises starting in June 2004 was nearing an end.

"That's why the dollar is vulnerable," said Tomoko Fujii, senior currency analyst at Bank of America in Tokyo, adding that markets were waiting for the Federal Reserves next rate setting meeting on January 31.

"That's the big event for the month. We expect two more rate hikes, but others are expecting only one," she said.

New York Fed President Timothy Geithner focused on the threat of the record and still-swelling U.S. current account deficit to the global economy and financial markets.

The euro fell against the dollar from a four-month high of US$1.2325 to reach a session low of US$1.2281 as short-term players trimmed their positions in largely technical trading.

Market players are turning their attention to the U.S. gross domestic product data due Friday.

Growth in the fourth quarter is expected to have slowed to an annualized 2.6 percent expansion from a 4.1 percent rise in the previous quarter, according to economists surveyed by Dow Jones Newswires.

Given the negative sentiment surrounding the dollar, it may not rise much even if the GDP data top expectations, but a disappointing reading could easily help send the dollar down, said Hideaki Furumaya, forex team manager at Trust & Custody Services Bank.

Updated : 2021-06-24 12:05 GMT+08:00