The New Taiwan dollar weakened against the greenback yesterday, ending a four-day rally as investors brace for holidays next week, dealers said.
The currency declined 0.18 percent, or NT$0.059, to NT$32.53 versus its US counterpart at the close of trade in Taipei yesterday on a light turnover of US$745 million on the Taipei Forex Inc, data from the company showed.
Adding transactions of US$293 million on the smaller Cosmos Foreign Exchange, total volume stood at US$1.038 billion, half the amount for the previous days, statistics from the two exchanges showed.
Altogether, the NT dollar picked up 2.3 percent, or NT$0.78, this week against the greenback on concerns assets denominated in the currency may shrink in value after the US Federal Reserve on Tuesday lowered interest rates to a range of zero to 0.25 percent.
A dealer, who asked not to be named, said the latest rebound in NT dollars peaked on Thursday and the currency would see relatively mild fluctuations before the Lunar New Year holidays.
“In the absence of external shocks, the forex market will remain calm and stable in the coming weeks as institutional players brace for Christmas and New Year holidays,” the trader said.
The NT dollar fluctuated between NT$32.476 and NT32.55 during the trading session.
“Though some exporters and investors with foreign investments have yet to trade US currency for NT dollars, the capital inflow will be limited,” the trader said by telephone, predicting the NT dollar would weaken to $32.7 against the greenback next week.
Another dealer, who spoke on condition of anonymity, voiced similar views.
The second dealer said the NT dollar’s seasonal upturn as normally observed before the Lunar New Year holidays may have already taken place, leaving the currency little room to strengthen next month.
“If that is the case, we may see sluggish trading next month, at variance with tradition,” the dealer said by telephone.
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