U.S. dollar tops NT$32 amid escalating geopolitical concerns

Taipei, Oct. 13 (CNA) The U.S. dollar rose sharply against the Taiwan dollar Tuesday to close above the NT$32 mark for the first time in two months as investors shifted funds to the greenback as a safe haven amid escalating geopolitical unease, dealers said.

After moving between NT$31.951 and NT$32.237, the U.S. dollar gained NT$0.190 or 0.59 percent to close at NT$32.085 on expanded turnover, marking the first time the currency ended above the NT$32 level since Aug. 14, when the American unit ended at NT$32.046.

The greenback received a strong boost soon after the local foreign exchange market opened, as investors reacted to news of another Houthi attack on Saudi Arabian airports that sent international crude oil prices soaring, dealers said.

The spike in crude oil prices raised fears over inflation, prompting investors to think the U.S. Federal Reserve will adopt a more hawkish monetary policy stance, which could lift the U.S. dollar, dealers added.

Dealers said a plunge on the local stock market with foreign institutional investors on the sell side added downward pressure on the Taiwan dollar and further boosted the U.S. dollar during the trading session.

Led by semiconductor stocks after heavy losses suffered by their U.S. counterparts overnight, the Taiex, the Taiwan Stock Exchange's benchmark index, tumbled 960.65 points, or 1.95 percent, at 48,341.31 after foreign institutional investors sold a net NT$165.34 billion in shares on the main board Tuesday, the third-largest net sell-off on record.

Foreign institutional investors moved their funds out of Taiwan to park them in greenback-denominated assets, dealers said.

Dealers said investors should pay close attention to the upcoming September U.S. consumer price index report due on Wednesday (U.S. time) for more clues about the Fed's next move.