The New Taiwan dollar on Friday rose against the US dollar, gaining NT$0.042 to close at NT$30.400 as the greenback gave up earlier gains due to the strength of other regional units, dealers said.
Friday’s session remained quiet on moderate turnover, as many traders preferred to stay on the sidelines, waiting for more economic data due from Washington later in the day, the dealers said.
It was the second consecutive session in which the US dollar moved lower against the NT dollar.
The greenback opened at NT$30.400 and moved between NT$30.355 and NT$30.468 before the close. Turnover totaled US$596 million during the trading session.
In the early-morning session, the US dollar staged a mild technical rebound, and momentum continued as traders witnessed the local equity market coming off an early high and falling into negative territory, the dealers said.
The NT dollar fell NT$0.019 against the greenback from its close of NT$30.381 on June 16.
Foreign institutional selling in local equities lent further support to the US dollar, the dealers added.
Foreign institutional investors sold a net NT$2.91 billion (US$95.72 million) of shares on the main board, sending the weighted index down 0.21 percent at the close on Friday, the Taiwan Stock Exchange said.
However, the US dollar started losing steam in the afternoon session, as other regional currencies, in particular the South Korean won, recovered from earlier losses, giving a strong hint to local traders to buy into the NT dollar, the dealers said.
The moderate trading volume showed caution among currency traders, who have been anxiously awaiting data on US manufacturing activity and new home sales for more clues about the US economy and how the US Federal Reserve will adjust its monetary policy, they added.
Elsewhere, the US dollar on Friday fell against a basket of major currencies, recording its biggest one-day fall in three weeks, on persistent doubts whether the Fed would raise interest rates again this year due to softening inflation data.
The greenback also broadly weakened versus commodity-linked currencies, which got a boost as global benchmark Brent futures recovered from a seven-month low.
Sterling rose for a third consecutive day after soon-to-depart Bank of England Monetary Policy Committee member Kristin Forbes late on Thursday urged the hiking of British rates immediately on fears that the pound’s weakness could have a lasting upward effect on inflation.
Trading volume was muted in the absence of major economic data.
“This has been largely a week of consolidation among major currency pairings given the lack of economic data this week,” Commonwealth Foreign Exchange chief market strategist Omer Esiner said in Washington.
The dollar index, which tracks the US dollar against six major peers, fell 0.35 percent to 97.248, retreating further from a one-month peak reached on Tuesday.
The euro was up 0.44 percent at US$1.1198, while the greenback slipped nearly 0.1 percent against the yen to ￥111.25. The pound gained 0.4 percent to US$1.2725.
The greenback rose earlier this week on comments from New York Federal Reserve President William Dudley, who said a tightening labor market would push up wages and cause US inflation to reverse upward toward the Fed’s 2 percent goal.
On Friday, St Louis Federal Reserve President James Bullard said the central bank should wait on further rate hikes, while Cleveland Federal Reserve President Loretta Mester said recent inflation weakness should not defer another rate rise this year.
However, traders were doubtful about another rate increase later this year, as recent US data on balance have fallen short of forecasts.
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