The New Taiwan dollar may hover around NT$33.0 to NT$32.8 mark against the US dollar during this week after experiencing a wave of surges last week fueled largely by a rising Japanese yen, sources from the banking industry said yesterday.
The local currency may increasingly lose steam against other major foreign currencies in the coming days due to a temporary halt to a rising yen as a result of strong manufacturing data and a fall in new claims for unemployment benefits announced by the US, the sources said.
The NT dollar ended at NT$32.929 against the greenback last Friday -- the highest closing level for the local currency since July 2002 -- which represents a marked rise of NT$0.345 from the week-earlier level of NT$33.274. The gain in value was mainly prompted by an appreciating yen, which finished at 104.24 against the US dollar.
The central bank did not intervene to stop the local currency's rise last week, the sources noted, adding that it is unlikely that the NT dollar will continue to appreciate this week and surpass the NT$32.8 level unless the yen rises to break the 103 mark against the greenback.
For the time being, the delicate political situation at home will play a key role in the NT dollar's short-term levels in the run-up to the presidential inauguration on May 20, they said, pointing out that the currency will not see dramatic fluctuations during that period and that the inaugural speech will be the focal point for the market.
In essence, the local currency is not expected to continue rising and will hover between the NY$33.0 to NT$32.8 range against the US dollar this week under the pressure of a weaker yen, which may lose in value against a rebounding US dollar, the sources said, adding that the lack of a bullish sentiment in the domestic stock market is another factor.
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