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

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

Taipei, March 21 (CNA) The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.008 to close at the day's high of NT$29.853 as the greenback was propped up by constant intervention from the local central bank in a bid to keep the local currency cheaper, dealers said. The U.S. dollar opened at NT$29.845 and moved to an early low of NT$29.770 before rebounding. Turnover totaled US$857 million during the trading session. Before the central bank stepped in, the U.S. dollar trended lower against the local unit soon after the local foreign exchange market opened, on hopes that the U.S. Federal Reserve will continue to pump large amounts of money into the market, the dealers said. The expectations were raised after the U.S. Fed concluded a policymaking meeting overnight in which it decided that the central bank will maintain its aggressive efforts to stimulate the U.S. economy through large-scale bond buying. Currently, the Fed spends US$85 billion per month buying government bonds and mortgage-backed securities from the market, in an operation known as quantitative easing. The dealers said further fund injections from the U.S. could create more spill-over effects overseas and lift the value of the currencies in the Asia-Pacific region, including the Taiwan dollar. The Fed's confirmation that it will continue its quantitative easing also raised market confidence in the global economy, which prompted traders to move their funds out of the U.S. dollar as a safe haven, they said. A stronger euro against the U.S. dollar propelled traders here to increase their Taiwan dollar holdings before the local central bank's intervention amid eased concerns over the debt problems in the eurozone, due to a commitment by the European Central Bank that it will provide liquidity to the banking system of debt-ridden Cyprus, the dealers said. (By Kao Chao-fen and Frances Huang)