Taipei-The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.043 to close at NT$29.993 as traders locked in gains built by the U.S. unit in recent sessions, dealers said.
The strength of other regional currencies against the U.S. dollar also increased selling in the U.S. unit, while further foreign institutional selling of local equities offset the downward pressure on the U.S. dollar, they said.
Nevertheless, the U.S. unit still closed below the NT$30 mark at the end of the session, the second time the currency has finished below that level in five trading sessions.
The greenback opened at NT$30.025, and moved between NT$29.983 and NT$30.030 before the close. Turnover totaled US$567 million during the trading session.
Soon after the local foreign exchange market opened, the U.S. dollar faced selling as local traders followed their regional counterparts in disposing of the greenback, taking advantage of the unit's recent upturn, dealers said.
The U.S. dollar, which follows the currencies of Washington's six major trading partners, moved lower on profit taking, giving a clear indication to local traders to dump greenbacks, they said.
The South Korean won, which the Taiwan dollar tracks closely, gained almost 0.60 percent against the U.S. dollar at one point, reflecting Seoul's higher foreign exchange reserves, which prompted traders to cut their holdings of U.S. dollars throughout the session, dealers said.
However, some local currency traders took their cue from continued foreign institutional selling in local equities to pick up U.S. dollars, helping the currency recoup some of its earlier losses, dealers added.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$517 million (US$17.24 million) worth of shares on the main board Tuesday.
Dealers said the U.S. dollar could become firmer against the Taiwan dollar ahead of a policymaking meeting scheduled by the U.S. Federal Reserve for next week, when the Fed is expected to raise key interest rates.
Source: Focus Taiwan News Channel