The New Taiwan dollar on Friday fell against the US dollar, losing NT$0.020 to close at NT$30.332 as local traders reacted to the weakness of other regional currencies and cut their holdings in the local unit, dealers said.
Foreign institutional selling on the local stock market also gave a boost to the US dollar and added downward pressure on the NT dollar, they said.
The greenback opened at NT$30.400 and moved between NT$30.310 and NT$30.405 before the close. Turnover totaled US$453 million during the trading session.
Despite the losses on Friday, the NT dollar closed up NT$0.026, or 0.09 percent, against the US dollar for the week. It closed at NT$30.358 on Aug. 11.
Trader sentiment on Friday toward the NT dollar was affected by losses suffered by other currencies in East Asia, including the South Korean won, which the local currency follows closely, dealers said.
Selling in regional currencies was sparked by doubts that US President Donald Trump will be able to push through his economic agenda after he dismantled two CEO advisory forums in the wake of his controversial remarks on violent protests in Charlottesville, Virginia, dealers said.
Under such circumstances, investors were reluctant to keep their funds in higher-risk assets in Asia, they added.
The won, which fell almost 0.4 percent against the US dollar at one point, gave a clear indication to traders to send the NT dollar lower, the dealers said.
The US dollar’s momentum also moved ahead on the back of foreign institutional selling on the local stock market, which pushed down the local currency further, they added.
Elsewhere in Asia, the US dollar dropped to a four-month low against the yen in early trading, but retraced some of its losses after rumors began to swirl about the impending firing of White House senior adviser Steve Bannon.
The White House confirmed Bannon’s exit in a statement on Friday afternoon.
As Trump’s chief strategist, Bannon was seen as representing a right-wing political faction that critics have said encourages white supremacists like those involved in the deadly rioting last weekend in Charlottesville.
Bannon was also seen by some market participants as an opposing force to US National Economic Council director Gary Cohn and US Secretary of the Treasury Steve Mnuchin.
At one point on Friday, the US dollar dropped nearly 1 percent against the yen to an intraday low of ¥108.65 before closing at ¥109.19.
“A lot of this was just carryover from the problems in the last few days out of Washington and the markets getting a bit dejected with the idea that Trump’s going to get any legislative initiatives done this summer or even this autumn,” Macquarie Ltd global interest rates and currencies strategist Thierry Albert Wizman said. “Especially given the public backlash against the administration in the last few days.”
As a candidate, Trump promised wide-ranging tax reform and fiscal stimulus measures that traders bet would kick-start the US economy and inflation.
The US dollar bounced back, but failed to move higher against the yen or the euro and surrendered gains late in the day against the British pound.
“[Friday] is kind of a microcosm of what we’ve seen all week,” Tempus Inc director of markets John Doyle said. “We’ve seen volatility, but it’s been short-term.”
The US dollar index, which tracks the greenback against six major currencies, rose 0.35 percent for the week.
The euro fell 0.5 percent, for its first weekly loss against the greenback in six weeks. The US dollar finished the week up nominally against the yen, gaining 0.1 percent.
“We’ve seen some ups and downs, but at the end of the week, the dollar, for the most part, isn’t much changed from where we started,” Doyle said.
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