USD/TWD ends higher

USD/TWD ends higher at 33.790 vs 1-week low of 33.620 yesterday close, as weak Asian share markets trigger USD short-covering in offshore market, foreign investors sell net NT$2.0 billion Taiwan shares amid Taiex's 0.3% loss, also after Standard & Poor's lowers outlook on Taiwan's sovereign rating to Negative from Stable yesterday. Foreign bank trader says "the U.S. dollar still has upward bias as the volatile global share markets discourage risk appetite." Tips pair in 33.700-33.900 band with upward bias tomorrow.

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The dollar's strength against the euro

The dollar's strength against the euro triggered late dollar buying from companies, sending the yuan lower against the U.S. dollar Wednesday.

Dealers said the dollar is likely to trade in a narrow range of 6.8300-6.8350 in the near term, as thin trading in recent sessions suggest investors are cautious pending clear market direction.

On the over-the-counter market, the dollar was at CNY6.8339 around 0730 GMT, up from Tuesday's close of CNY6.8320. It traded between CNY6.8310 and CNY6.8348.

The dollar-yuan central parity rate was set at 6.8293, down from 6.8296 Tuesday.

"There was increased dollar buying from companies in the afternoon, but banks were less enthusiastic due to a lack of clear direction for the currency market globally," said a Shanghai-based dealer at a local bank.

The dollar's strength against the euro Wednesday prompted some late dollar buying. At 0730 GMT, the euro was at $1.3214, down from $1.3274 Tuesday in New York.

Dealers said the People's Bank of China fine-tuned the central parity following the dollar's sharp fall against the Japanese yen Tuesday, which indicated Beijing's intention to support the yuan and keep the currency stable.

The dollar was at Y98.83 late Tuesday in New York, down from Y100.04 Monday.

However, a Shanghai-based dealer at a foreign bank said the yuan is now in a reasonable trading range. "There are no fundamental factors that can support further yuan strength at least within this week," she said.

Offshore, one-year dollar-yuan nondeliverable forwards were at 6.7499/6.7549, up from 6.7368/6.7468 late Tuesday afternoon.

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