The US dollar on Friday fell against the New Taiwan dollar, shedding NT$0.095 to close at the day’s low of NT$30.650 on the back of fund inflows into the nation and selling by local exporters to meet end-of-month fund demand, dealers said.
The strength of other regional currencies, in particular the South Korean won, gave an additional boost to the NT dollar, but foreign institutional selling on the local stock market prevented the greenback from tumbling further, they said.
For the week, the US dollar fell NT$0.146, or 0.48 percent, from NT$30.796 on Feb. 18 against the NT dollar after losing ground in four sessions in a row.
Photo: AFP
On Friday, the greenback opened at NT$30.700 and hit a high of NT$30.735 before succumbing to pressure and finishing at the day’s low. Turnover totaled US$799 million.
Selling in the US dollar was sparked by uncertainty over tax reform in the US after US Secretary of the Treasury Steven Mnuchin, in his first televised interview, offered few details on US President Donald Trump’s long-anticipated tax reform plan, dealers said.
Mnuchin suggested that much work was still needed on key elements of a tax reform plan, one of the policies investors had anticipated would spur inflation and drive up US interest rates.
The disappointment with Mnuchin’s interview boosted regional currencies, in particular sending the won, which the NT dollar tracks closely, to a four-month high at one point.
The stronger won led local traders to buy into the NT dollar, dealers said.
In addition, local exporters moved to sell US dollars for NT dollars throughout the session to meet fund demand as the month is coming to an end, which also hurt the greenback, dealers added.
Friday was the last session on the foreign exchange market this month. Trading is scheduled to resume on Wednesday after a four-day public holiday.
However, the US dollar did get some support from foreign institutional selling on the local stock market, dealers said.
Foreign institutional investors sold a net NT$1.62 billion (US$52.85 million) in shares on the main exchange on Friday, Taiwan Stock Exchange data showed.
There were no signs that the central bank stepped into the market to prop up the US dollar, as it has done in the past when the greenback has come under pressure, dealers said.
The US dollar fell to a more than two-week low against the Japanese yen on Friday as investors doubted the likelihood of swift tax reform and a quick spending boost from Trump’s administration.
Analysts said that US Federal Reserve meeting minutes released on Wednesday reinforced doubts about a rate hike next month, as voting members showed much less urgency to tighten credit.
The US dollar fell as much as 0.6 percent against the safe-haven yen to ¥111.95.
Its first dip below ¥112 since Feb. 9 put the greenback on track for its second straight weekly loss against the Japanese currency, of about 0.8 percent.
“Markets are sort of growing a lot more cautious on prospects for US fiscal stimulus, and consequently I think they are now skeptical of the Fed hiking substantially over the next two years,” Credit Agricole foreign exchange strategist NeVassili Serebriakov said in New York.
The euro slipped 0.2 percent against the US dollar in afternoon trading to a session low of US$1.0558. That put it on course for a 0.5 percent decline for a third straight weekly slide.
The euro’s modest drop helped put the US dollar index, which measures the greenback against a basket of six major currencies, on course for its third straight weekly gain.
The gain was small at just 0.2 percent, with the index last up only slightly at 101.110 after recovering from a one-week low of 100.660 earlier.
The index hit a 14-year high of 103.820 at the start of the year, largely on the hopes surrounding Trump’s avowed pro-growth policies.
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