Sun, Apr 15, 2018 - Page 14 News List

NT dollar slides; US dollar steady amid ambiguity

SUPPORT:The Hong Kong Monetary Authority worked to shore up the Hong Kong dollar, which touched the bottom end of its allowed range for the first time ever

Staff writer, with agencies

The New Taiwan dollar on Friday slipped against the US dollar, losing NT$0.042 to close at NT$29.302.

Turnover totaled US$1.22 billion during the trading session.

The greenback opened at NT$29.265 and moved between NT$29.245 and NT$29.360 before the close.

That compared with a close of NT$29.148 on April 3, the last day of Taipei trading before the Tomb Sweeping Day holiday.

Elsewhere on Friday, the US dollar was little changed against a basket of major currencies as traders waited for more clarity on a possible Western military intervention in Syria.

The US dollar index, which measures the greenback against a basket of six major currencies, was up 0.03 percent at 89.78.

“It had looked to many investors that the world was headed for a trade war and an escalating risk of war in Syria,” New York-based Brown Brothers Harriman global head of currency strategy Marc Chandler said in a note. “But now it seems less clear.”

The US Federal Reserve will probably need to raise interest rates at least three more times this year in the face of a robust US economy, even while possible trade disruptions pose risks, Boston Fed President Eric Rosengren said.

This month’s preliminary reading of consumer sentiment from the University of Michigan fell to 97.8, down from 101.4 last month. The consensus forecast was for a reading of 100.5.

“Although it fell in April, the University of Michigan consumer confidence index remains at a high level by past standards and suggests that the slowdown in spending growth at the start of this year will prove to be a blip,” Capital Economics Ltd economist Andrew Hunter said in a note.

The US dollar was on pace for a weekly gain of 0.4 percent against the Japanese yen and 0.3 percent against the Swiss franc.

The Swiss and Japanese currencies are often sought in times of global tension, partly because the countries have big current account surpluses.

The weakening of the safe-haven currencies suggested that investors were less worried after a week dominated by US-China trade tensions and the possibility of a US-led missile strike on Syria.

Sterling rose to a 10-week high against the US dollar and pulled itself out of a six-month trading range against the euro, prompting investors to unwind long euro positions.

The Hong Kong Monetary Authority, the territory’s de facto central bank, intervened in currency markets as it looks to shore up the Hong Kong dollar, which fell to HK$7.85 against the US dollar, the weakest point of its trading band.

It is the first time the currency has touched the bottom end of its permitted HK$7.75 to HK$7.85 band since the range was introduced in 2005.

The move came as masses of cash in the territory’s economy mean local interest rates have not been able to rise alongside those of the Fed.

This has resulted in investors buying more US dollars to benefit from the better returns in the US.

However, analysts said they expected further interventions as demand for the Hong Kong unit remained weak.

In Singapore, authorities effectively tightened monetary policy as the city-state’s economy continues to improve and inflation picks up, although still at a moderate pace.

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