The US dollar on Friday fell against the New Taiwan dollar, shedding NT$0.051 to close at NT$31.050 as it hovered around a 19-month low for the second consecutive trading session, dealers said.
The weakness of the US dollar reflected fears that US President Donald Trump would take steps to push down the value of the greenback after criticizing Japan, China and Germany for manipulating their currencies to boost their global competitiveness, they said.
The US dollar fell to its lowest point since closing at NT$31.002 against the NT dollar on June 23 last year.
The greenback opened at NT$31.050 and moved between NT$30.950 and NT$31.079 before the close. Turnover totaled US$1.088 billion during the trading session.
The US dollar came under heavy downward pressure soon after the foreign exchange market opened and fell below the NT$31 mark amid worries over the possibility that Trump would do more to weigh down the greenback’s value, dealers said.
There were few signs that foreign investors were moving funds into the region on Friday, which has helped push the US dollar down in recent weeks.
However, the psychological impact of Trump’s criticism unnerved traders and led them to raise their holdings in regional currencies throughout the session, they said.
The losses suffered by the US dollar were later capped by foreign institutional selling on the stock market, dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors on Friday sold a net NT$5.23 billion (US$168.4 million) of shares on the main board.
In addition, after seeing the US dollar slump below the NT$31 mark, many local exporters and insurance companies jumped in to sell the NT dollar to take advantage of the greenback’s cheap valuation.
The US dollar was on track for its sixth week of losses and for its steepest weekly drop since July last year as US employment data that showed robust hiring was marred by little evidence of wage pressures.
The greenback shed early gains after subdued wage growth signaled that there was little pressure on the US Federal Reserve to step up its pace of interest rate hikes this year from the two or three that are envisioned.
The US dollar saw choppy trading after the employment data, briefly rising to new highs against several G10 peers before US dollar-buying enthusiasm fizzled as the wage data were assessed.
The 10-year US Treasury yield remained near its low for the session.
While the greenback has approached levels that just a few weeks ago were deemed attractive for longer-term players to begin building US dollar longs, a foreign exchange policy shift in the US could outweigh potential advantages of a robust economy and rising yields, said traders who asked not to be identified, because they are not authorized to speak publicly.
The euro rose to a fresh high near US$1.0800 late on Friday morning after dropping as low as US$1.0713 after the jobs data; offers are in place above US$1.0830 and might slow or cap gains as they did on Thursday.
The euro is likely to face technical resistance at the high of US$1.0874 on Dec. 8 last year.
The yen fell to a fresh low at ¥112.32, eclipsing the ¥112.51 low set overnight after the Bank of Japan tweaked its bond-buying programs, giving the yen a brief boost; the US dollar remains close to the weekly low near ¥112.00 and stop-loss sell orders are in place below that level, a trader in London said.
The pound fell as low as US$1.2460, extending its drop from Thursday’s high at US$1.2706 as services growth in the UK cooled.
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