The New Taiwan dollar yesterday continued to weaken against the US dollar to close at NT$30.186 as escalating trade friction between the US and China prompted investors to park their funds in the greenback as a safe haven, dealers said.
The NT dollar lost NT$0.184, or about 0.61 percent, against the greenback, marking the eighth straight day of losses and the lowest close since Nov. 12 last year, when it ended at NT$30.19.
A plunging equity market also pressured the NT dollar and boosted the greenback throughout the session, the dealers said.
At the opening, the NT dollar fell to NT$30.115 and moved between NT$30.086 and NT$30.188 before the close. Turnover totaled US$1.731 billion.
The US dollar’s strength from the previous session carried on to yesterday after the local equity market opened, as traders took their cue from trade tensions between the US and China to buy into the greenback, the dealers said.
US President Donald Trump on Monday threatened to impose a 10 percent tariff on US$200 billion worth of Chinese goods after China last week said it would slap a 25 percent tariff on US$36 billion worth of US goods starting on July 6.
Another US$16 billion worth of US goods could face tariffs after a review, Beijing said.
China’s move came after the US levied a 25 percent tariff on Chinese goods, including machinery, robotics, aerospace items, information technology devices and auto products, also scheduled to take effect on July 6.
Trump’s latest threat scared many currency traders in the region, prompting them to move their funds out of non-US-dollar-denominated assets, which battered the region’s currencies, the dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$21.36 billion (US$708 million) worth of shares on the main board, sending the weighted index down 1.65 percent at the close.
As the central bank is not expected to raise its key interest rates any time soon, the NT dollar could continue to weaken, particularly given the current rate hike cycle in the US, the dealers said.
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