Taipei, Sep 2 (CNA) The U.S. dollar continued its ascent on Friday, hitting its highest level against the Taiwanese currency in 34 months, on expectations that the U.S. Federal Reserve will maintain its aggressive monetary policy, dealers said.
The greenback rose NT$0.057 from the previous day to close at NT$30.588 on the Taipei FX market on Friday, the highest level since October 21, 2019, when it closed at NT$30.611. .
The US currency opened at NT$30.560 and moved between NT$30.530 and NT$30.599 before the close.
Dealers say the U.S. dollar’s rise was driven by investor projections that the Fed will raise interest rates another 150 basis points, after Cleveland Fed President Loretta Mester said earlier this week that it expected benchmark interest rates to climb above 4%. early next year.
Mester’s remarks came after Fed Chairman Jerome Powell indicated on Aug. 26 that the U.S. central bank was likely to maintain a rate hike cycle “for some time” to stamp out inflation.
Against this backdrop, the U.S. dollar index, which tracks the currencies of Washington’s major trading partners, rose above 109 as foreign investors moved funds out of the region, pushing regional currencies lower, dealers said.
The weak Taiwanese dollar also reflected a decline in other regional currencies, particularly the Japanese yen, which fell below 140 against the US dollar at some point for the first time since 1998, dealers added.
In addition, a 0.87% decline in Taiex, Taiwan’s benchmark equity-weighted index, put pressure on the Taiwan dollar, after foreign institutional investors sold NT$14.63 billion. of actions on the main board on Friday.
This week, the greenback rose NT$0.370, or 1.2%, against the Taiwan dollar, marking the sixth consecutive week of gains.
The U.S. currency is expected to climb to 30.80 Taiwan dollars soon, driven by higher U.S. interest rates, dealers said.
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