Taipei-, The U.S. dollar fell sharply against the Taiwan dollar Friday, shedding NT$0.178 to close at NT$31.602 as foreign investors continued to move funds into the country because of the greenback's weakness in international markets, dealers said.
Further foreign institutional buying in stocks in Taiwan added downward pressure on the U.S. dollar, pushing the currency to its lowest level since Nov. 10, 2016, when it closed at NT$31.589 against the Taiwan dollar.
For the week, the U.S. dollar lost NT$0.391, or 1.22 percent, against the Taiwan dollar.
On Friday, the greenback opened at NT$31.650, and moved between NT$31.570 and NT$31.695 before the close. Turnover totaled US$1.037 billion during the trading session.
The U.S. dollar encountered heavy selling soon after Taiwan's foreign exchange market opened on continuing foreign fund inflows into Taiwan, dealers said.
Currency traders were disappointed with a news conference held by Donald Trump on Wednesday in which the American president-elect failed to unveil any details on economic stimulus or infrastructure policies, leading them to change their trading strategy.
Many traders who had previously bet on a stronger U.S. dollar decided to switch sides and short the U.S. dollar, and many foreign investors move their funds into non-U.S. dollar denominated assets, dealers said.
At home, foreign institutional investors who remained upbeat about Taiwan's stock market continued to pour funds into the market, increasing demand for the Taiwan dollar and boosting its value, according to dealers.
Foreign institutional investors bought a net NT$1.08 billion (US$34.18 million) in shares on the main board Friday after a net buy of NT$10.39 billion in shares a day earlier.
Dealers said that with the Lunar New Year holiday approaching, seasonal fund demand will rise to push up the Taiwan dollar and place further pressure on the U.S. dollar in the short term.
Source: Focus Taiwan News Channel