Taipei, The U.S. dollar rose against the Taiwan dollar Tuesday, gaining NT$0.112 to close at NT$30.668 as currency traders dumped the local currency amid falling equity prices, dealers said.
The weakness of other currencies in the region also prompted traders here to cut their holdings in the Taiwan dollar, which further boosted the U.S. dollar, particularly during the afternoon session, dealers said.
The greenback opened at NT$30.570, and moved between NT$30.541 and NT$30.670 before the close. Turnover totaled US$814 million during the trading session.
Soon after the local foreign exchange market opened, the U.S. dollar rose against the Taiwan dollar on follow-through buying from the previous session, and interest in the greenback accelerated as currency traders saw the local equity market plunging amid selling in large-cap stocks by foreign institutional investors, dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$12.27 billion (US$400 million) worth of shares on the main board Tuesday, sending the weighted index down 1.20 percent.
Selling in the Taiwan dollar became more visible as foreign investors moved their funds out of the country, dealers said.
Amid the trade tensions between the United States and China, currency traders have been moving their funds into the U.S. dollar as a safe haven, which has helped boost the greenback against the regional currencies, dealers said.
The losses suffered by other regional currencies also put pressure on the Taiwan dollar, especially after the South Korea won, which the Taiwan dollar tracks closely, fell almost 0.70 percent against the U.S. dollar at one point, dealers said.
In addition, the Indonesian rupiah fell to a 20-year low against the U.S. dollar amid worry over Indonesia's current account deficit, which also gave traders here a strong hint to dispose of the Taiwan dollar, dealers said.
The Taiwan dollar also lacked support because it is the beginning of the month and there is no high demand among Taiwanese exporters, dealers said.
Source: Focus Taiwan News Channel