Suspected central bank selling pushed the Taiwan dollar lower on Friday, reversing gains earlier in the day as G20 finance ministers sought to defuse growing global currency tensions. The Taiwan dollar ended at T$30.91 per US dollar, compared with its Thursday close of T$30.869.
It had edged up earlier in the session after US Treasury Secretary Timothy Geithner urged G20 members not to weaken their currencies or keep them undervalued. But many leaders at the meeting in South Korea dismissed a flurry of US proposals, raising questions about whether the meeting would yield any substantive agreement and pushing the dollar down broadly in trade.
"The Taiwan dollar is affected by G20," a dealer in Taipei said. "There shouldn't be a specific, clear agreement coming out, so the US dollar came down a bit and risk came back up a bit." Traders believe the USD could continue its retreat soon amid expectations that the Fed will embark on a fresh round of quantitative easing to revive the US economic recovery, despite Geithner's pledge not to devalue the US dollar.
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