The New Taiwan dollar rose to its highest in four and a half years on speculation that overseas buyers will increase demand for the currency as they raise their investments in Taiwanese stocks.
The NT dollar gained NT$0.133, or 0.4 percent, to close at NT$31.199 against its US counterpart on the Taipei foreign exchange market.
That figure was the highest close since Sept. 15, 2000.
As of yesterday, fund managers abroad bought a net NT$92 billion (US$2.9 billion) of Taiwan's shares this month, compared with net sales last month, according to stock exchange figures.
The continued appreciation in local currency has caused domestic textile makers to publicly petition the central bank to intervene in the foreign exchange market.
In a statement released on Tuesday night, textile makers complained that a stronger NT dollar is eroding their competitiveness and earnings as they compete against their Chinese rivals in the US and Europe.
The NT dollar also strengthened yesterday after the central bank said in a statement that it hasn't been selling the US currency.
"The [central] bank has not been selling US dollars. Foreign media reports are inconsistent with facts," the bank said.
The remark came as a Chinese-language business daily reported yesterday that "according to foreign media reports, the US dollar declined sharply as Taiwan's central bank and the Bank of Korea plan to sell the US currency."
Earlier in the day, the Bank of Korea said the market had misunderstood reports on the issue. It insisted that it had no plan to sell some of its dollar forex reserves.
At the same time, the bank said it did plan to diversify its forex reserves in the interest of securing a better investment return.
"That they haven't been selling the dollar doesn't mean they won't sell," Tommy Ong, vice president of the treasury and markets at DBS Bank (Hong Kong) Ltd, a unit of Southeast Asia's biggest lender by assets.
"They want to avoid a freefall of the US dollar because obviously they have a pretty large portion of the dollar in their reserves," he said.
The NT dollar may rise to NT$30.25 against the greenback in about a month, Ong said.
Lehman Brothers said yesterday in a report, Taiwan's Temporary Pause, that "Faced with renewed upward pressure on the NT dollar, we judge that Taiwan's central bank would once again [at least initially] intervene heavily in the forex market."
The NT dollar pared gains of as much as 0.6 percent on speculation the central bank sold its some of its currency holdings, said Joseph Lee, a currency trader at Cathay United Bank (
``There was speculation that the authority sold the Taiwan dollar just to slow down its gains,'' he said.
George Chou (
The NT dollar's gains may also encourage some exporters to convert overseas earnings on concern the currency's advance may accelerate, said Gary Huang, a currency trader at Union Bank of Taiwan (
A strengthening currency reduces the amount of foreign-exchange proceeds such companies can get out of their profits.
Merida Industry Co (美利達) has seen signs of recovery in the US and European markets this year, as customers are gradually depleting their inventories, the bicycle maker told shareholders yesterday. Given robust growth in new orders at its Taiwanese factory, coupled with its subsidiaries’ improving performance, Merida said it remains confident about the bicycle market’s prospects and expects steady growth in its core business this year. CAUTION ON CHINA However, the company must handle the Chinese market with great caution, as sales of road bikes there have declined significantly, affecting its revenue and profitability, Merida said in a statement, adding that it would
Greek tourism student Katerina quit within a month of starting work at a five-star hotel in Halkidiki, one of the country’s top destinations, because she said conditions were so dire. Beyond the bad pay, the 22-year-old said that her working and living conditions were “miserable and unacceptable.” Millions holiday in Greece every year, but its vital tourism industry is finding it harder and harder to recruit Greeks to look after them. “I was asked to work in any department of the hotel where there was a need, from service to cleaning,” said Katerina, a tourism and marketing student, who would
i Gasoline and diesel prices at fuel stations are this week to rise NT$0.1 per liter, as tensions in the Middle East pushed crude oil prices higher last week, CPC Corp, Taiwan (台灣中油) and Formosa Petrochemical Corp (台塑石化) said yesterday. International crude oil prices last week rose for the third consecutive week due to an escalating conflict between Israel and Iran, as the market is concerned that the situation in the Middle East might affect crude oil supply, CPC and Formosa said in separate statements. Front-month Brent crude oil futures — the international oil benchmark — rose 3.75 percent to settle at US$77.01
RISING: Strong exports, and life insurance companies’ efforts to manage currency risks indicates the NT dollar would eventually pass the 29 level, an expert said The New Taiwan dollar yesterday rallied to its strongest in three years amid inflows to the nation’s stock market and broad-based weakness in the US dollar. Exporter sales of the US currency and a repatriation of funds from local asset managers also played a role, said two traders, who asked not to be identified as they were not authorized to speak publicly. State-owned banks were seen buying the greenback yesterday, but only at a moderate scale, the traders said. The local currency gained 0.77 percent, outperforming almost all of its Asian peers, to close at NT$29.165 per US dollar in Taipei trading yesterday. The
RSS