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U.S. dollar closes lower on Taipei forex (update)

U.S. dollar closes lower on Taipei forex (update)

Taipei, Sept. 4 (CNA) The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.018 to close at NT$29.902 as further fund inflows boosted the value of the local currency, dealers said. A stronger euro against the greenback also encouraged traders here to buy the Taiwan dollar on expectations that the European Central Bank (ECB) will soon expand its efforts to buy bonds from debt-ridden countries to deal with the financial crisis in the region, they said. However, the gains posted by the Taiwan dollar were compromised by the local central bank's intervention to slow down the pace of the local currency's appreciation by the end of the session, they added. The U.S. unit opened at NT$29.920, and moved between NT$29.815 and NT$29.949 before the close. Turnover totaled US$655 million during the trading session. As Taiwan and China signed a memorandum of understanding last Friday to set up a currency clearing system for direct Chinese yuan transactions, traders have turned upbeat about the economic benefits to be brought in to Taiwan by the new mechanism amid closer cross-strait business ties, dealers said. Foreign investors have moved funds into Taiwan in the latest two sessions to take advantage of the new development, which helped to strengthen the Taiwan dollar, they said. In addition, the global financial markets have embraced high hopes that the U.S. Federal Reserve will further ease liquidity to boost the economy, a move which is expected to create a spill-over effect in Asia, where the currencies are likely to appreciate accordingly, they added. Last Friday at the annual meeting of the world's central bankers in Wyoming's Jackson Hole, U.S. Fed Chairman Ben Bernanke hinted in his keynote speech that the Fed did not rule out the possibility of launching another round of quantitative easing. Meanwhile, ahead of an ECB policymaking meeting scheduled for Thursday, market expectations have accelerated that the central bank will announce more bond purchasing measures, which has boosted the euro, dealers said.
However, the local central bank intervened in late trade after the greenback fell below the NT$29.90 level against the Taiwan dollar so that the upside of the Taiwan dollar was capped by the end of the session, they said. (By Eva Feng and Frances Huang)


Updated : 2021-10-26 05:15 GMT+08:00