Taipei, The U.S. dollar hit its highest level in more than two years against the Taiwan dollar Friday as traders acted on the continued weakness of other regional currencies, in particular the Chinese yuan and South Korean won, dealers said.
Foreign investors rushed to move their funds out of the region to put them into U.S.-denominated assets amid concerns that the trade war between the United States and Taiwan, which many thought was close to a resolution 10 days ago, could now continue for quite a while.
The U.S. dollar gained NT$0.132 against the Taiwan dollar Friday to close at NT$31.297, the highest level since Jan. 26, 2017, when the greenback closed at NT$31.360. Turnover totaled US$1.223 billion during the trading session.
The greenback opened at NT$31.180, and moved between NT$31.150 and NT$31.309 before the close.
For the week, the U.S. dollar rose NT$0.339 or about 1.10 percent against the Taiwan dollar.
Soon after the local foreign exchange market opened Friday, the U.S. dollar extended its momentum from a session earlier, and buying in the greenback increased on the back of the losses suffered by the yuan and the won, dealers said.
The U.S. dollar's rise was also boosted by the flow of foreign investor funds out of regional currency markets amid rising worries over the U.S.-China trade battle.
Dealers said traders in the region watched the movement of the yuan closely on expectations that Chinese authorities would weaken the yuan to offset the impact of higher tariffs on Chinese goods imposed by the United States.
The yuan had fallen 0.51 percent against the greenback at one point Friday.
The yuan's fall triggered a currency depreciation competition in the region and the won also dropped 0.57 percent at one point against the U.S. dollar, which led traders in Taiwan to dump their holdings in the Taiwan dollar, dealers added.
Additional pressure on the Taiwan dollar came from a sell-off by foreign institutional investors on Taiwan's stock market, dealers said.
On Friday, the weighted index on the Taiwan Stock Exchange ended down 90.50 points, or 0.86 percent, at the day's low of 10,384.11 after foreign institutional investors sold a net NT$10.26 billion in shares.
Source: Focus Taiwan News Channel