The New Taiwan dollar yesterday fell to its weakest closing level against the US dollar in more than a month, closing down NT$0.28, or 0.84 percent to NT$33.689 on the Taipei foreign exchange market.
Turnover totalled US$998 million, up from the previous day's US$653 million, the exchange said.
Large flows of US dollar short covering and a weakening yen pressured the local currency to the range between NT$33.409 and NT$33.700 through the session.
A lower-than-expected profit forecast by TSMC and Chairman Morris Chang's (
`There's going to be a little bit of support for the US dollar against the New Taiwan dollar,'' Claudio Piron, head of foreign exchange strategy at Standard Chartered Bank in Singapore, told the Bloomberg yesterday, in reference to the news from TSMC.
The central bank was reportedly intervening in the market to slow the local unit's fall against the greenback, dealers said. They predict the unit is likely to test NT$33.80 to NT$33.90 next week.
But researchers at the Taiwan Institute of Economic Research said the unit -- while being dealt a setback this week -- would continue to appreciate against its US counterpart in the longer term.
With Taiwan's economic fundamentals improving steadily, the New Taiwan dollar is expected to trade on average at NT$33.20 against the greenback during the second half of the year, with an average of NT$33.97 for this year, said Wu Rong-i (吳榮義), president of the Taiwan Institute of Economic Research, yesterday at a press conference.
David Waples, executive vice president and chief financial officer of ING Antai Life Insurance Co, told the Taipei Times that weak fundamentals in the US' certainly point to more gains for the local currency.
"I think the NT dollar will continue to appreciate against the US dollar while historically low interest rates prevail in US" Waples said.
Waples said the weakness in US equity prices is also contributing to a weaker US dollar. "In the next six months, the level may dip to NT$32 to one US dollar," he said.
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