The Taiwan dollar jumped on Friday after falling in early trade as the US currency lost value globally, pushing non-deliverable forward rates in Taiwan's favour as exporters bought the local unit, dealers said. The Taiwan dollar closed at T$30.653 against the US dollar, compared with its previous close at T$30.824.
But an intra-day dip to T$30.908 saw the currency hit its lowest point since March 17, when it bottomed out at T$30.998. Volume on the main Taipei Forex Inc was $1.154 billion, down from a seldom-seen $3.803 billion a day earlier. "The price is hollow, so if there's any foreign fund flow, the change is huge," a dealer in Taipei said, describing Friday's fluctuations. "In the afternoon the US dollar lost value and non-deliverable forward discounts went up."
As the US dollar rebounded globally earlier this week, investors began to pull out of the Taiwan currency. But the US dollar fell against the yen late on Thursday as US stock futures pared earlier gains, and the euro strengthened against the US currency on Friday. Investors sold US dollars in the non-deliverable forwards market, with six-month NDFs quoted at -0.310/-0.270, compared with Thursday's -0.170/-0.120.
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