Taipei--The U.S. dollar fell against the Taiwan dollar on Tuesday, shedding NT$0.162 to close at NT$30.868 as local traders took their cue from continued foreign fund inflows into the country, dealers said.
The strength of other regional currencies and further foreign institutional buying on the local equity market increased downward pressure on the U.S. dollar, pushing the currency below NT$31, the lowest level for nearly 21 months, they said.
The greenback opened at NT$30.980 and moved between NT$30.745 and NT$31.010 before the close of trading. Turnover totaled US$1.054 billion during the session.
Soon after the local foreign exchange market opened, the U.S. dollar faced heavy selling and fell below the NT$31 mark. Its downturn continued to the end of the session on the back of further fund inflows, dealers said.
Many Taiwanese investors operating in China have rushed to move their funds back to Taiwan as Chinese authorities step up efforts to crack down on tax evasion, they said.
The Taiwanese investors who repatriated their money view Taiwan as a safe haven, a move attributed to recent gains posted by the Taiwan dollar, they added.
Local currency traders were also motivated by the strength of the South Korean won, which the Taiwan dollar tracks closely, to cut their holdings of U.S. dollars as the greenback weakens against major currencies, dealers said.
The losses suffered by the U.S. dollar were caused by doubts that President Donald Trump will be able to carry out all the policies he has promised to implement, such as infrastructure investments, they said.
The won rose 1.28 percent against the U.S. dollar, the largest gain among currencies in Asia, ahead of the Taiwan dollar, which gained 0.52 percent against the greenback, according to data compiled by the local central bank.
Solid foreign institutional buying in local equities gave an additional boost to the Taiwan dollar, pushing the U.S. dollar even lower, dealers said. According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$5.60 billion (US$181 million) of shares on the main board Tuesday.
Source: Focus Taiwan News Channel