Taipei, July 22 (CNA) The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.002 to close at NT$30.035 as traders were encouraged by the strength of other regional currencies to raise their holdings in the local unit, dealers said.
Buying in the Taiwan dollar also reflected foreign institutional investors' interest in the local bourse, which gave another boost to the local currency throughout the session, the dealers said.
However, the losses suffered by the U.S. dollar were limited by the Taiwan central bank's continued efforts to prop up the currency in a bid to keep the local currency cheaper and strengthen Taiwan's global competitiveness, they said.
The greenback opened at the day's high of NT$30.035 and moved to a low of NT$29.973 before rebounding. Turnover totaled US$514 million during the trading session.
After opening lower, the U.S. dollar continued to lose momentum against the Taiwan dollar in the wake of gains posted by other currencies in the region, in particular the South Korean won and the Chinese yuan, the dealers said.
The gaining won, which rose 0.29 percent against the U.S. dollar at one point on the back of foreign buying in the Seoul equity market, gave a strong hint to traders to pick up the Taiwan dollar, they said.
A stronger yuan placed more downward pressure on the U.S. dollar in the local foreign exchange market after the People's Bank of China (PBOC) raised the yuan's reference rate against the greenback, the dealers said.
The POBC's move gave traders in the region reason to believe the Chinese authorities will allow more room for the currency to trend higher against the U.S. dollar, which could lead other regional units to gain, they said.
In the local bourse, foreign institutional investors shifted to the buy side and served as net buyers of NT$6.62 billion (US$220 million)-worth of local shares, which further boosted demand for the Taiwan dollar. A day earlier, foreign investors sold a net NT$119 million in the local bourse.
After the U.S. dollar fell below the NT$30.00 mark, the central bank continued its efforts to push up the greenback, the dealers said.
Market sentiment remained cautious, keeping turnover moderate as many traders preferred to stay on the sidelines, waiting for U.S. June inflation data due out later in the day, they said.
