The Bank of Japan’s (BOJ) surprise interest cut on Friday sent the yen tumbling against other major currencies.
However, the US dollar surprisingly gained when a worse-than-expected US report on economic growth in the fourth quarter weakened the argument for the US Federal Reserve hiking interest rates again at its next meeting in March.
The yen lost about 2 percent on the greenback, to ￥121.12, and about 1 percent on the euro, to ￥131.19, after the BOJ cut its short-term rate paid for bank deposits into negative territory.
Photo: Reuters
US fourth-quarter GDP growth came in at a lower-than-expected 0.7 percent, after a 2 percent pace in the third quarter, signaling possibly another winter slump.
The euro fell slightly on Friday, to US$1.0831, from US$1.0941 on Thursday.
The US dollar rose against the New Taiwan dollar yesterday, gaining NT$0.050 to close at NT$33.650 after moving in a narrow range on thin trading, dealers said.
The US dollar ended the previous week at NT$33.705
The low turnover resulted in part from the absence of many foreign traders during the rare Saturday session, held to make up for the loss of a work day during the extended Lunar New Year holiday that starts on Saturday, they said.
Taiwan’s central bank intervened to prop up the US dollar and help the greenback recoup earlier losses and close above the previous day’s closing level, dealers said.
The greenback opened at NT$33.560, and moved between NT$33.350 and NT$33.670 before the close. Turnover totaled US$275 million during the trading session.
The US dollar opened lower against the NT dollar on follow-through selling from a session earlier, and the downward momentum continued as local exporters sustained their selling of the greenback in exchange for NT dollars to meet seasonal fund demand, dealers said.
Foreign institutional investors’ net purchase of NT$2.57 billion (US$76.37 million) in shares on Taiwan’s stock market yesterday also put downward pressure on the US dollar.
Sluggish demand for the greenback was somewhat offset by the US dollar’s technical rebound in international markets and intervention by the central bank late in the session to protect the nation’s export competitiveness vaulted the US dollar back into positive territory at the close, dealers said.
The low turnover made it relatively easy for the central bank to drive down the value of the NT dollar, they said.
The baht climbed 0.4 percent on Friday to 35.713 per US dollar in Bangkok and earlier reached 35.670, the highest level since Nov. 26 last year, according to data compiled by Bloomberg.
The ringgit strengthened 1.3 percent to 4.1537 per US dollar in Kuala Lumpur and was up 3.5 percent from Friday last week, prices from local banks compiled by Bloomberg show. It reached 4.1195 on Friday, the highest level since October last year.
The British pound fell slightly on Friday to US$1.4244, from US$1.4359 on Thursday.
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