Taipei-The U.S. dollar rose against the Taiwan dollar Monday, gaining NT$0.008 to close at NT$30.036 as traders here reacted to the passage of a tax reform bill in the U.S. Senate over the weekend, dealers said.
The weakness of other regional currencies against the U.S. dollar and foreign institutional selling of Taiwan stocks also encouraged traders in Taipei to bid up the greenback to its highest level since Nov. 21, when it closed at NT$30.060, they said.
The greenback opened at NT$30.040, and moved between NT$30.010 and NT$30.043 before the close. Turnover totaled US$700 million during the trading session.
Soon after the local foreign exchange market opened, the U.S. dollar continued its momentum from a session earlier after the U.S. Senate approved its own version of the tax overhaul bill, dealers said.
Though the U.S. Senate and House will have to enter talks to reconcile their different tax reform bills, the passage of the Senate means U.S. efforts to cut corporate taxes and boost the economy made significant progress, they said.
The upbeat mood prompted currency traders to buy into the U.S. dollar and dispose of non-greenback denominated assets, a move that pushed down most of the currencies in the region, dealers said.
Among the losing regional currencies, the South Korean won, which the Taiwan dollar tracks closely, fell about 0.30 percent against the U.S. dollar at one point, giving a clear hint to traders here to cut their Taiwan dollar holdings, they said.
Despite the gains in stock prices, foreign institutional investors remained on the sell side in Taiwan's stock market, causing the Taiwan dollar to move further down, dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$1.43 billion (US$47.61 million) in shares on the market on Monday after a net sell of NT$7.69 billion on Friday.
Dealers said the U.S. dollar is expected to continue to firm up on expectations that the U.S. Federal Reserve will raise its key interest rates at a policymaking meeting scheduled for next week.
Source: Focus Taiwan News Channel