Wed, Jan 03, 2018 - Page 12 News List

NT dollar gains at four-year high

EMERGING EQUITY RALLY:US economic expansion is promising for manufacturing nations, which has foreign currency investors showing a revived interest in Taiwan

By Crystal Hsu  /  Staff reporter

The New Taiwan dollar yesterday gained 0.74 percent, or NT$0.22, to a four-year high of NT$29.628 against the US dollar in Taipei trading, rising at the fastest pace in more than eight months on the back of hot money inflows, traders said.

The increase was in stark contrast with a tiny range of trade for several months after an 8.14 percent appreciation last year. Turnover totaled US$1.18 billion (US$39.83 million) at the Taipei Foreign Exchange Market and Cosmos Foreign Exchange Market.

“The trend had to do with general expectations of extended rallies across emerging equity markets,” a trader said on condition of anonymity.

The TAIEX advanced 0.64 percent to 10,710.73 on turnover of NT$103.559 billion yesterday, after foreign institutional investors increased their positions by NT$8.65 billion, Taiwan Stock Exchange data showed.

Local proprietary traders built up holdings by NT$885 million, while mutual funds cut NT$134 million.

Foreign investors have shown revived interest in local shares because continued economic expansion in the US bodes well for Asian nations which are home to manufacturing facilities of global consumer brands, the trader said.

Asian central banks could take cues from the US Federal Reserve and tighten their monetary policy in line with stronger GDP showings, another trader said.

The Bank of Korea in November last year raised interest rates by 25 basis points for the first time in six years as the economy exceeded even the highest expectations, he said.

The won gained 0.88 percent yesterday, outperforming the NT dollar and other currencies, a Bank of Korea statement said.

The yuan picked up 0.16 percent, while the yen climbed a marginal 0.02 percent, the statement said.

Receding appetite for risk-hedging tools, such as the yen, accounted for its lackluster performance, a trader said.

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