Taipei, Feb. 17 (CNA) The U.S. dollar fell against the Taiwan dollar on Friday, shedding NT$0.016 to close at NT$30.776 as the greenback gave up earlier gains on the back of selling by Taiwanese exporters, dealers said.
Continued fund inflows into the country and further institutional buying in the local equity market also pushed the U.S. dollar into negative territory at the end of trading, they said.
The greenback opened at NT$30.810 and moved between NT$30.755 and NT$30.839 before the close. Turnover totaled US$625 million during the session.
Soon after the local foreign exchange market opened, the U.S. dollar staged a technical rebound against the Taiwan dollar from its fall on Thursday to pass the NT$30.8 mark and hit a high for the day, as traders took their cue from the weakness of other regional currencies, in particular the South Korean won, which the local unit tracks closely, dealers said.
The losses suffered by the Taiwan dollar came amid caution over the rate hike cycle of the U.S. Federal Reserve after Fed Chair Janet Yellen said in congressional testimony earlier in the week that it would be "unwise" for the central bank to wait too long to raise interest rates, they said.
However, after the U.S. dollar hit its high for the day, selling set in as local exporters shifted to the sell side to lock up earlier gains at a time when foreign funds continue to flow into the country, dealers said.
Of the recent fund inflows the largest has come from Taiwanese investors operating in China since the Chinese authorities started to crack down on tax evasion by foreign investors, they said.
Many Taiwanese investors viewed Taiwan as a safe haven for now, dealers said, adding that there is little sign such fund inflows will stop any time soon.
Foreign institutional buying on the local bourse, picking up select small and medium cap stocks, also served to boost the Taiwan dollar, pushing down the U.S. dollar further for most of the session, dealers said.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$1.66 billion (US$53.90 million) worth of shares on the main board on Friday, although the weighted index closed down 0.12 percent.
The local foreign exchange market will open on Saturday to make up for a reduced trading session caused by a lengthened national holiday scheduled for next week.
(By Chiu Po-sheng and Frances Huang)