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U.S. dollar ends above NT$30.10 mark on Taipei forex market

2018/06/19 17:55:27

Taipei, June 19 (CNA) The U.S. dollar continued its momentum, rising significantly higher to close above the NT$30.10 mark against the Taiwan dollar Tuesday as escalating trade friction between Washington and Beijing prompted investors to park their funds in the greenback as a safe haven, dealers said.

The U.S. dollar gained NT$0.184 or about 0.61 percent to close at NT$30.186 against the Taiwan dollar, marking the eighth consecutive session the U.S. currency has moved higher in Taipei.

A plunging equity market in Taiwan also placed downward pressure on the Taiwan dollar and gave an additional boost to the U.S. dollar throughout the session, dealers said.

At the opening, the greenback quickly rose to NT$30.115, and moved between NT$30.086 and NT$30.188 before the close. Turnover totaled US$1.731 billion during the trading session.

The U.S. dollar closed at its highest since Nov. 13, 2017, when the currency ended at NT$30.190 against the Taiwan dollar.

Soon after the local equity market opened, the U.S. dollar's strength from the earlier session continued as traders took their cue from the latest trade tensions between the United States and China to buy into the greenback, dealers said.

On Monday, President Donald Trump threatened to impose a 10 percent tariff on US$200 billion worth of Chinese goods after China announced last week it would slap a retaliatory 25 percent tariff on US$36 billion worth of U.S. goods, starting from July 6, and another list of US$16 billion worth of U.S. goods could face tariffs after a review.

China's move came soon after the U.S. announced the imposition of a 25 percent tariff on Chinese goods, including machinery, robotics, aerospace items, information technology devices and auto products, starting July 6.

The latest Trump threats scared many currency traders in the region, prompting them to move their funds out of non-greenback denominated assets, which battered local currencies in the region, including the Taiwan dollar, dealers said.

The heavy losses incurred on the local equity market amid worries over a possible trade war between Washington and Beijing also served as a catalyst to the falling Taiwan dollar, dealers added.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$21.36 billion (US$708 million) worth of shares on the main board, sending the weighted index down 1.65 percent at the close of trading.

As the local central bank is not expected to raise its key interest rates any time soon, the weakness of the Taiwan dollar could continue, particularly given the current rate hike cycle in the U.S. market, dealers said.

(By Chiu Po-sheng and Frances Huang)