The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.114 to close at NT$31.706 as traders locked in gains built in the U.S. currency in recent sessions, dealers said.
The strength of other regional currencies and a rebound staged by Taiwan's equity market added downward pressure on the U.S. dollar throughout the session, they said.
The greenback opened at NT$31.700, and moved between NT$31.650 and NT$31.739 before the close. Turnover totaled US$717 million during the trading session.
The Taiwan dollar had fallen 1.29 percent against the U.S. currency in the past two sessions, driven down by hawkish comments by U.S. Federal Reserve officials, including Fed Vice Chairman Stanley Fischer, on the need for an interest rate hike.
But it was in demand soon after the foreign exchange market opened Tuesday, as traders hoped to pick up the Taiwan dollar at a relatively low valuation, dealers said.
Regional currencies that had been driven down by the comments by Fed officials also rebounded on Tuesday, with the South Korean won, which the Taiwan dollar tracks closely, rising about 0.97 percent against the U.S. dollar at one point.
That rebound led traders here to buy more of the local currency, dealers said.
The weighted index on the Taiwan stock exchange rebounded by 0.55 percent from a 0.58 percent fall seen a session earlier, giving an additional indication to currency traders to raise their holdings in the Taiwan dollar, dealers said.
Despite the selling in the U.S. dollar, however, turnover in Taiwan's foreign exchange market remained moderate, with many traders acting cautiously, waiting for more of an indication of where the Fed's monetary policy is going next, they said.
Source: Focus Taiwan