Sat, Jan 08, 2011 - Page 1 News List

NT dollar advances to 13-year high against greenback

By Crystal Hsu  /  Staff Reporter

The New Taiwan dollar rose to a 13-year high in Taipei trading yesterday, closing beyond the NT$30 level of resistance for the first time since October 1997 as exporters sold the US currency ahead of the Lunar New Year.

The NT dollar gained 0.1 percent to trade at NT$29.8 against the greenback after fluctuating in a tight range of NT$29.22 and NT$30.135, Taipei Forex Inc data showed.

Transactions reached US$956 million at Taipei Forex Inc, slightly higher than the previous day. Including turnover of US$445 million at the smaller Cosmos Foreign Exchange Inc, total trading volume amounted to US$1.4 billion yesterday.

“The central bank probably considered it time for the NT dollar to better reflect its market value after foreign funds apparently pulled out,” a trader said yesterday on condition of anonymity.

The central bank refrains from intervention if real demand rather than speculation drives up the NT dollar, the trader said.

Most Taiwanese firms distribute annual bonuses in the days ahead of the Lunar New Year, which falls on Feb. 3 this year, fueling demand for the local currency, especially among exporters.

The trader cited the ongoing stock market correction as a sign of hot money outflows. The TAIEX shed 100.49 points, or 1.13 percent, to close at 8,782.72 yesterday after major institutional investors sold a net NT$1.59 billion (US$54.2 million) in shares.

The trader expects the NT dollar to trade between NT$29 and NT$30 this month.

An economist at Mega Securities Co (兆豐證券) said the NT dollar would strengthen further this year because global capital would continue to flow to emerging Asian economies to cash in on the region’s fast--growing economies in the wake of US quantitative easing.

“I would not be surprised if the NT dollar rises to NT$29 against the US currency, with sporadic retreats,” he said, asking not to be named.

This story has been viewed 2528 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top