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U.S. dollar hits nearly 2 month high, tops NT$32.500

06/26/2024 07:42 PM
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CNA file photo
CNA file photo

Taipei, June 26 (CNA) The U.S. dollar moved sharply higher to its highest level in nearly two months, passing the NT$32.500 mark against the Taiwan dollar Wednesday after an official from the U.S. Federal Reserve made hawkish comments on monetary policy, dealers said.

The greenback rose NT$0.111 to close at NT$32.554, the highest since April 29, when the American currency ended at NT$32.558.

The U.S. dollar opened moderately higher against the Taiwan dollar and buying accelerated in particular in the afternoon session to push the American unit over the NT$32.500 mark by the end of the session.

The strength of the U.S. dollar against the Taiwan dollar reflected a 0.3 percent rise in the U.S. dollar index, which traces the greenback against the currencies of six U.S. major trading partners, dealers said.

The U.S. dollar index trended higher after Fed governor Michelle Bowman said overnight that she expects no rate cuts this year as she sees a number of upside risks to the inflation outlook.

"Inflation in the US remains elevated and I still see a number of upside inflation risks that affect my outlook," Bowman said at an event held in London.

In addition to the Taiwan dollar, other Asian currencies also weakened against the U.S. dollar with the Chinese yuan down 0.05 percent, the South Korea won down 0.09 percent and the Japanese yen down 0.26 percent. The Taiwan dollar shed 0.34 percent against the greenback to become the weakest currency in the Asian market on Wednesday.

While the Taiex, the weighted index on the Taiwan stock exchange, rose 0.48 percent on Wednesday, foreign institutional investors still stood on the sell side, registering net sales of NT$8.25 billion worth of shares on the main board, taking into account the weakness of the local currency, dealers said.

The silver lining was that local exporters rushed to sell their U.S. dollars in exchange for more Taiwan dollars by taking advantage of the strength of the greenback, which prevented the local currency from falling further, dealers added.

On Friday U.S. time, the U.S. is scheduled to report the May Personal Consumption Expenditure Price Index (PCE), one of the favorite indexes when the Fed considers how to adjust monetary policy.

Dealers said market sentiment will remain cautious ahead of the PCE release, adding that the Taiwan dollar is expected to move in consolidation over the next two sessions.

(By Pan Tzu-yu and Frances Huang)

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