The US dollar’s exchange rate fell against the Taiwan dollar on Wednesday, shedding NT$0.004 to close at NT$30.290, amid improved sentiment toward the global economy after the US reported an increase in manufacturing activity for December, dealers said.
The upbeat mood on the economic fundamentals prompted many investors to take more risks by moving their funds from the US dollar as a safe bet to the stock markets, they said.
The US dollar opened at the day’s high of NT$30.295 and moved to a low of NT$30.180 before rebounding. Turnover totaled US$531 million during the trading session. The Institute of Supply Management’s manufacturing index rose to 53.9 in December from 52.7 in November.
Along with expansion in manufacturing activity in China and Germany, the US data appeared very encouraging and pushed up Wall Street overnight, paving the way for the upside in the local bourse, dealers said.
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The benchmark weighted index closed up 0.41 percent at 7,082.97 points on the back of follow-through buying as investors turned upbeat about a global economic recovery.
A rising local bourse boosted demand for the Taiwan dollar during the trading session, dealers said.
They said such optimism toward the global economy helped offset the impact of lingering concerns over the debt problems in the eurozone.
A rebound by the euro to a one week high against the US dollar overnight also gave a strong hint to traders in the local foreign exchange market to increase their Taiwan dollar holdings, dealers added.