The New Taiwan dollar closed up 0.25 percent at NT$30.376 against the US dollar on Wednesday, its second straight trading day of appreciation before the Lunar New Year holiday.
The NT dollar rose by NT$0.075 versus the greenback on the Taipei Foreign Exchange Market, from NT$30.451 recorded on Tuesday.
On the smaller Cosmos Foreign Exchange Market, the local currency ended at NT$30.365 against the US dollar on Wednesday, up NT$0.073 from Tuesday.
The NT dollar had declined against the US dollar for six trading sessions in a row before Tuesday, closing at NT$30.511 on Monday — its lowest level since Oct. 6, 2011 — due to the net outflows of foreign portfolio investors on the final trading day on the local bourse ahead of the New Year holiday.
The local forex market is closed through Tuesday for the holiday.
Capital Securities Corp (群益證券) said the NT dollar may fall further against the US dollar when the market reopens on Wednesday, if the US Federal Reserve’s Federal Open Market Committee were to announce yesterday that it would taper the scale of its bond-buying scheme by US$10 billion a month.
Yuanta-Polaris Research Institute (元大寶華研究院) said that the NT dollar would stay between NT$30.4 and NT$30.5 in the near term.
“The central bank will keep the NT dollar lower in line with other softening Asian currencies,” Yuanta-Polaris said in a research note.
However, in the longer run, the NT dollar may face appreciation pressure following the rise in the Chinese yuan, if the government sustains its moves to develop Taiwan into an offshore yuan center, Yuanta-Polaris said.
Total trading in Taipei was light on Wednesday because of the closure of the local stock market, with a US$509 million turnover on the Taipei Forex and US$267 million on the Cosmos forex market.
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