The New Taiwan dollar dived along with other Asian currencies yesterday as investors cut emerging---market assets after downside risks to the US economy heightened, dulling the nation’s export outlook, analysts said.
The NT dollar fell 1.39 percent, or NT$0.422, to NT$30.372 against the US currency in Taipei yesterday, dropping to its lowest level since Dec. 28, when the local currency closed at NT$30.396, central bank data showed.
Turnover totaled US$2.33 billion, including US$1.7 billion at Taipei Forex Inc and US$607 million at smaller Cosmos Foreign Exchange, more than double Wednesday’s turnover of US$1.13 billion, according to the two exchange companies.
“The NT dollar is likely to trade lower in the near future, but may find support at NT$30.5,” a local currency trader said.
If the US economy worsens, domestic technology firms will suffer, as Americans are the world’s major consumers for smartphones, PCs and other electronics, the dealer said.
The US Federal Reserve had said overnight that there are “significant downside risks to the US economy” and that it would replace US$400 billion of short-term debt in its portfolio with longer-term Treasuries to reduce borrowing costs and counter the growing risk of another recession.
Markets apparently considered the stimulus inadequate, judging by the tumbling bourses across the world, the trader said.
Reports earlier this week that Quanta Computer Inc (廣達電腦), the world’s largest notebook PC maker, would cut nearly 2,000 jobs deepened pessimism about sub-seasonal Christmas demand next quarter, the dealer said.
Taiwan’s central bank issued a statement last night saying the NT dollar is relatively stable, compared with the South Korean won, which dropped 2.53 percent yesterday.
The won has shed 12 percent since the onset of the global market turmoil early last month, steeper than the NT dollar’s 5.3 percent fall, foreign exchange statistics show.
The stock sell-off yesterday precipitated a 3.06 percent drop on the TAIEX to 7,305.50
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