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Strong demand for greenback to keep NT dollar weaker

The NT dollar is expected to hover in a range between NT$33.35 and NT$33.45 against the US dollar this week, maintaining a trend of slight depreciation against the greenback, dealers said yesterday.

Market dealers predicted that the local currency, continuing last week's depreciation trend against the US dollar, will move further down in value in the coming days, driven by a weaker yen and stronger demand from local importers for US dollars.

The NT dollar closed at NT$33.364 against the greenback on Friday, down NT$0.145 from the previous week's NT$33.22.

With a positive outlook for the US economy, the yen came under pressure, although some market players remained unconvinced that the US dollar's downtrend is really over.

The yen might continue to depreciate against the US dollar in the short term, moving in the ¥108 to ¥111 range, the market players said, predicting that it will be very difficult for the yen to achieve levels against the greenback higher than ¥110 in the near future. It stood at ¥109.46 against the greenback on Friday afternoon, down from ¥107.34 the previous week.

The US dollar's short-term appreciation last week was attributed to a euro devaluation that was the result of rampant speculation that the European central bank will raise interest rates. However, dealers said the euro will stand firm against the greenback at a level of 1.24 and that the US dollar will gradually drift lower in the medium and long term.
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