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

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

Taipei, Dec. 28 (CNA) The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.01 to close at the day's high of NT$29.136 after the local central bank bought into the greenback, helping the unit reverse its earlier losses by the end of the session, dealers said. The expanded turnover showed the central bank's aggressive buying in the U.S. currency throughout the session in a bid to slow down the pace of the Taiwan dollar's appreciation and strengthen the island's global competitiveness, they said. The U.S. dollar opened at NT$29.130 and moved to an early low of NT$29.031 before rebounding. Turnover totaled US$1.14 billion during the trading session. Before the central bank's intervention, the U.S. dollar continued to trend lower against the Taiwan dollar as foreign funds kept flowing into the Asian markets. This was a spill-over effect from the heavy liquidity in major markets as a result of their central banks releasing more funds to boost the economy, dealers said. The strength of other currencies in the region, in particular the South Korean won, gave a strong hint to traders here to cut their U.S. dollar holdings, dealers said. A 0.66 percent rebound in the local bourse also placed downward pressure on the U.S. dollar after foreign institutional investors bought NT$4.14 billion (US$142 million) net worth of local shares, dealers said. Local exporters and foreign banks rushed to dump their U.S. dollar holdings in exchange for the Taiwan dollar, betting that the local currency would continue to rise on the wave of fund inflows, dealers said. In a rare move, Taiwan's central bank stepped in to buy the U.S. dollar before the close of the morning session of the foreign exchange market, dealers said. Central bank buying usually is seen in late trade, they said. After the market opened for the afternoon session, the U.S. dollar fell again as foreign funds continued to flow in, prompting the central bank to intervene in a show of determination to cap the gains posted by the Taiwan dollar, they said. In addition to effects of the fund inflows on the U.S. dollar, it is expected to weaken against the currencies in Asia as the regional economies show signs of recovering in 2013. (By Eva Feng and Frances Huang)


Updated : 2021-01-20 12:34 GMT+08:00