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U.S. dollar closes up (update)

U.S. dollar closes up (update)

Taipei, Jan. 22 (CNA) The U.S. dollar rose against the Taiwan dollar Tuesday, gaining NT$0.025 to close at the day's high of NT$29.095 after the greenback recouped earlier losses on intervention from the local central bank, dealers said. In addition to the central bank's efforts to prop up the U.S. dollar, some foreign banks shifted to the "buy" side to raise their holdings in the currency, which reduced downward pressure on the unit to some extent after the South Korean won fell sharply against the U.S. currency, the dealers said. The U.S. currency opened at NT$29.070 and moved to an early low of NT$28.971 before rebounding. Turnover totaled US$639 million during the trading session. Ahead of the central bank's intervention, the U.S. dollar continued a downtrend and fell below the NT$29.00 mark against the Taiwan dollar again as traders were betting that the U.S. unit would fall further on fund inflows, the dealers said. The constant buying into the U.S. dollar showed the bank's attempts to keep the currency above NT$29.00 in a bid to strengthen Taiwan's global competitiveness, they said. During the session, some foreign banks changed gear by cutting their Taiwan dollar positions after they took cues from the falling South Korean won, which reversed its recent strength after South Korean Finance Minister Bahk Jae Wan said the won's recent gains could hurt exports, the dealers said. Bahk's comments stirred up market speculation that Seoul will not allow its currency to trend much lower against the U.S. dollar, which could prompt other countries in the region, including Taiwan, to lead their units to depreciate, they said. Intervention from the central banks in the region is expected to escalate amid ample liquidity after major central banks around the world, such as the United States Federal Reserve, has kept pumping funds into the market, they added. An announcement by the Bank of Japan (BOJ), the Japanese central bank, however, to conduct open-ended asset purchases from 2014 made many traders in the region relieved about the liquidity in the region as additional large-fund BOJ injections will not be seen until a year from now, the dealers said.
(By Kao Chao-fen and Frances Huang)


Updated : 2021-03-05 15:56 GMT+08:00