Taipei, The U.S. dollar rose almost 3 percent against the Taiwan dollar in 2018, when successive interest rate hikes by the U.S. Federal Reserve led many investors to park their funds in greenback-denominated assets, dealers said.
On Friday, the U.S. dollar fell NT$0.069 against the Taiwan dollar to close at NT$30.733, the highest it has been since Dec. 4, when the greenback closed at NT$30.705, because of rising fund demand by local exporters with December coming to an end.
Friday was the Taipei foreign exchange market's last trading session of the year.
Still, the U.S. dollar appreciated NT$0.885, or 2.88 percent, against the Taiwan dollar for the year as a whole after falling 2.98 percent in 2016 and 7.43 percent in 2017 against the local currency.
The Taiwan dollar was relatively stable against the U.S. dollar compared with other currencies in 2018.
The Australian dollar fell 9.49 percent against the greenback, while the British pound slid 6.04 percent, the Chinese yuan shed 5.04 percent, the euro dropped 4.16 percent, and the South Korean won lost 4.05 percent against the U.S. currency.
With the U.S. economy growing at a faster than expected pace, the Fed raised its key interest rates four times during the year, making the U.S. dollar more attractive to many investors, dealers said.
Trade friction between the United States and China also worried currency traders and investors in the region, which led them to move their funds out of non-U.S. dollar denominated assets, pushing non-U.S. dollar currencies, including the Taiwan dollar, lower.
In addition, Taiwan's stock market fell 8.6 percent in 2018 after foreign institutional investors registered a net sell of more than NT$350 billion (US$11.40 billion), putting more downward pressure on the Taiwan dollar, dealers said.
Looking ahead, the Taiwan dollar could be bolstered by rising fund demand in the beginning of next year as the Lunar New Year holiday approaches in February, but after that the Taiwan dollar is expected to move in a narrow range, dealers said.
Source: Focus Taiwan News Channel