The US Dollar Closes Higher Pulling Down the Taiwan Dollar
The recent news hit saying that the US dollar has risen in comparison to the Taiwan Dollar. The US Dollar has gained NT$0.06 to close at NT$31. According to the dealers, the weakness of other currencies of the world has resulted into the increase in the US unit. In addition to this, local equities have also contributed to the same.
Yes, the fall in these equities because of foreign institutional selling has heightened the dollar. However, a number of traders have taken the sidelines and are still looking forward to the hints from the US Federal Reserve’s policy adjustments. Before the close, the greenback started at NT$31.810 and reached to NT$31.824.
In addition to this, the US dollar posed a technical rebound from a fall witnessed a session right after the moment local foreign exchange market was opened. Dealers further added that the same momentum continued and the other regional currencies suffered a loss. In fact, Fed Vice Chairman Stanley Fischer highlighted the need for the rate hike.
While talking about the regional currencies that suffered selling, the Taiwan dollar ranks the first. Against the US dollar, the Taiwan dollar has dropped up to 0.57 percent. As a result of this, the local traders are left with no other option than to dispose of the local currency. No doubt, it has resulted in the upheaval in the entire market. The local traders are sure to suffer great losses due to this.
The US Dollar
As you may already be aware, the US Dollar is probably one of the world’s strongest currency. It is also one of the most used currency in international transactions as well as the world’s primary reserve currency. Many countries use the US Dollar as their official currency and in many other countries it is the de facto currency. Hence, rise or fall in any currency affects the US Dollar most of the times. So when the other currency like the Taiwan Dollar weakened, it didn’t really come as a surprise the US Dollar gained at that time.
Annual Central Bankers’ Meeting, Jackson Hole
According to the media reports, various traders and policymakers are going to gather for annual meeting of the central bankers which is going to be held at Jackson Hole. After paying enough attention to the Hawkish stance, these traders are now focusing only on the annual meet. Their focus is no shifted to the Fed Chair Janet Yellen, who will be present at the meeting to address the traders.
On the other hand, the traders are expecting a hike in the interest rate of the dollar in the early September this year. However, nothing can be said clearly until the announcement of Yellen. Besides the expectations, it is true that the other regional currencies including the Taiwan dollar will be weaken if there is a rise on the US dollar. No doubt, the representatives of the other nations other than US must be expecting Yellen not to utter any hint of rise. For now, they are just sitting with their fingers crossed and are waiting for the final declaration of Yellen.
It is known that the foreign institutional investors have sold shares of worth net NT$300 million on the local main board. The unfortunate part is that it has further pushed the Taiwan dollar downward throughout the session. Without a doubt, this news is true, as it is revealed by the dealers themselves. However, the future decision after the annual meet is yet to be witnessed. It is sure that it will further result into a great commotion.