The US dollar yesterday continued its rise against the New Taiwan dollar, gaining NT$0.031 to close at NT$32.533, in the wake of Britain’s vote on Thursday to leave the EU, dealers said.
The US dollar also received a boost from the People’s Bank of China’s (PBOC) move to lower the yuan’s reference rate against the greenback and foreign institutional selling in Taiwan’s stock markets, they said.
The greenback rose to the highest on Taiwan’s foreign exchange market since June 3, when it closed at NT$32.605.
Yesterday, it opened at NT$32.550, and moved between NT$32.501 and NT$32.600 before the close. Turnover totaled US$902 million.
The US dollar opened higher against the NT dollar on follow-through buying, as market sentiment toward regional currencies continued to be haunted by the shock of the Brexit vote, dealers said.
Funds flocked to the greenback as a safe haven, causing regional currencies, in particular the South Korean won, which the NT dollar tracks closely, to fall, they said.
The losses suffered by the won, which fell 0.7 percent against the US dollar at one point, gave traders in Taiwan reason to cut their NT dollar holdings throughout the session, dealers said.
The PBOC’s decision to lower the yuan’s reference rate by 0.0599 yuan against the US dollar — the largest cut since Aug. 13 last year — also led traders to dump the NT dollar, dealers said.
Foreign institutional investors continued to be net sellers in Taiwan’s stock market, pushing the local currency lower, they said.
Taiwan Stock Exchange figures showed that foreign institutional investors sold a net NT$1.52 billion (US$46.72 million) worth of shares yesterday, after a net sell of NT$13.02 billion on Friday last week.
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