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U.S. dollar dips to below NT$31.3 in Taipei trading on Fed comments

11/29/2023 11:24 AM
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CNA file photo
CNA file photo

Taipei, Nov. 29 (CNA) The U.S. dollar continued its downward trend Wednesday morning, falling below the NT$31.3 mark against the Taiwan dollar as a U.S. Federal Reserve official struck a dovish tone on the U.S. central bank's monetary policy, dealers said.

As of 10:53 a.m., the U.S. dollar was trading at NT$31.275, down NT$0.193 against the Taiwan dollar after moving between NT$31.257 and NT$31.400.

The NT$31.257 level was the lowest the greenback has traded against the Taiwan currency since July 27, when it hit NT$31.156 at one point.

Wednesday's weakness extended from Tuesday, when the U.S. dollar closed down NT$0.102 at NT$31.468, the lowest level in a week.

Soon after the market opened, the greenback faced lingering downward pressure following comments by Fed Governor Christopher Waller, who said overnight that the Fed's monetary policy is "currently well positioned" to slow the economy and bring inflation back to 2 percent, the alert level set by the bank.

Christopher's comments came ahead of the next Fed policymaking meeting slated for Dec. 12-13, prompting investors to think the U.S. central bank will leave its key interest rates unchanged and bring the recent cycle of rising interest rates to an end, dealers said.

Those hopes pushed down the benchmark U.S. 10-year Treasury yield by almost 6 basis points to 4.33 percent Tuesday, leading investors to move their funds out of U.S. dollar denominated assets and into Asia, putting pressure on the U.S. currency, dealers said.

The U.S. dollar index, which tracks the value of the greenback against the currencies of Washington's six major trading partners, fell below the 103 mark to 102 overnight, giving a boost to regional currencies, including the Taiwan dollar, dealers said.

Dealers said investors should keep a close eye on the release of the U.S. personal consumption expenditures (PCE) price index for October due out Thursday to get a better indication of what the Fed might do next.

(By Pan Tzu-yu and Frances Huang)

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