The New Taiwan dollar on Friday rose against the US dollar, gaining NT$0.027 to close at NT$31.050, edging up 0.1 percent from NT$31.081 a week earlier.
Turnover totaled US$1.297 billion during the trading session.
The greenback opened at NT$31.065, and moved between NT$31.020 and NT$31.069 before the close.
Elsewhere on Friday, the US dollar rose in early trading, swinging back into positive territory after the New York Federal Reserve Bank walked back dovish comments from its president the prior day, which had bolstered expectations of an aggressive interest rate cut this month.
At a conference on Thursday, New York Federal Reserve Bank President John Williams argued for pre-emptive measures to avoid having to deal with too-low inflation and interest rates.
The greenback dropped before rebounding after a New York Fed representative subsequently said that Williams’ comments were not about immediate policy direction.
Williams has “reassured markets that his comments were academic and not about immediate policy changes, and the [US] dollar has modestly recovered as a result,” Western Union Business Solutions corporate hedging manager Joshua Tadbir said.
Investors are now pricing in a 43.1 percent chance of a 50-basis point cut in US rates later this month, according to CME Group Inc’s FedWatch tool, easing off the 60.2 percent probability hit on Thursday.
The US dollar has held up reasonably well as investors bet other central banks will also ease policy.
The greenback remains sensitive to any Fed news, “as traders are positioned for at least three rate cuts by year-end, including the 25-basis-point cut that is fully priced into the market this month. Should these probabilities change, as a result of the Fed potentially indicating a one-and-done attitude this month, then the [US] dollar could rapidly appreciate as the futures market repositions,” Tadbir said.
The US dollar index, which hit a two-week low of 96.648 on Thursday, rose 0.26 percent to 97.042.
The euro on Friday fell against the rebounding US dollar and hit a two-year low versus the Swiss franc, as investors ramped up bets for a European Central Bank interest rate cut as early as next week.
Money markets are now pricing in an about 60 percent chance of a 10-basis point rate cut next week, versus a 40 percent chance earlier in the week.
The euro was 0.39 percent lower at US$1.123.
Against the Swiss franc it touched a two-year low of SF1.103 per euro, down 0.41 percent on the day.
The franc, viewed as a safe haven, has benefited as investors grow nervous about the eurozone’s economic outlook.
The Japanese yen, also a safe haven, dropped against the US dollar, falling 0.35 percent to ￥107.64.
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