The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.066 to close at NT$31.772 as traders took cues from the weakness of other regional currencies to push up the U.S. unit, dealers said.
A fall in local equities due to further foreign institutional selling gave an addition boost to the U.S. dollar, while sentiment remained cautious with many traders taking to the sidelines, waiting for more clues about the U.S. Federal Reserve's policy adjustments, they said.
The greenback opened at NT$31.810, and moved between NT$31.744 and NT$31.824 before the close. Turnover totaled US$719 million during the trading session.
The U.S. dollar staged a technical rebound from a fall seen a session earlier soon after the local foreign exchange market opened, and momentum continued in the wake of the losses suffered by other regional currencies, dealers said.
Currency traders in the region cut their holdings as several Fed officials, including Fed Vice Chairman Stanley Fischer, voiced the need for a rate hike, they said.
The South Korean won, which the Taiwan dollar tracks closely, was among the regional currencies to suffer selling, dropping 0.57 percent against the U.S. dollar at one point, which prompted traders here to dispose of the local currency, they added.
After heeding the hawkish stance held by several Fed officials, traders shifted their attention to Fed Chair Janet Yellen, who is scheduled to address the annual central bankers' meeting in Jackson Hole, Wyoming, on Friday, dealers said.
Fears have been on the rise that if Yellen utters any hint of a rate increase, the regional currencies, including the Taiwan dollar, are expected to weaken further, they said.
On Wednesday, foreign institutional investors sold a net NT$300 million (US$9.44 million) worth of shares on the local main board, which added downward pressure on the Taiwan dollar throughout the session, dealers said.
Source: Focus Taiwan