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

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

Taipei, May 22 (CNA) The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.018 to close at NT$29.960, as the greenback recouped early losses on the back of local central bank intervention, dealers said. The move by the central bank to prop up the U.S. dollar late in the session was the result of the bank taking a cue from a weaker South Korean won and confirmed that it was reluctant to see the Taiwan dollar lag behind in the regional currency devaluation race, the dealers said. The U.S. dollar opened at NT$29.968 and moved between NT$29.776 and NT$29.970 before the close. Turnover totaled US$908 million during the trading session. Before the central bank stepped in, the U.S. dollar extended its losses from a session earlier after the local foreign exchange market opened, as foreign institutional investors continued to move funds into the country, the dealers said. Riding the wave of ample liquidity, foreign institutional investors served as net buyers of NT$5.34 billion (US$178 million)- worth of local shares, which sent demand for the Taiwan dollar higher, they said.
A rising Chinese yuan also gave an indication to traders here to boost their holdings in the Taiwan dollar on hopes that the strength of the yuan will continue to stir up buying interest in other regional currencies, the dealers said. The gains were posted by the yuan after the People's Bank of China hiked the reference rate for the yuan against the U.S. dollar to a new high as foreign money kept streaming into China, they said. The won was depressed by fears that U.S. Federal Reserve Chairman Ben Bernanke would hint at an early exit from the Fed's quantitative easing in a testimony scheduled for later in the day on Capitol Hill, the dealers said. Currently, the U.S. central bank pumps a total of US$85 billion into the market via purchases of government bonds and mortgage-backed securities every month to boost the economy, which has created spill-over effects in the region to boost the value of currencies such as the Taiwan dollar, the yuan and the won. (By Lin Hui-chun and Frances Huang)


Updated : 2021-05-06 08:05 GMT+08:00