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

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

Taipei, May 23 (CNA) The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.065 to close at NT$30.025 as foreign institutional investors shifted to the sell side of the local bourse, which lifted demand for the greenback, dealers said. The local central bank continued to intervene toward the end of the trading session, further propping up the U.S. dollar in a bid to make the local unit cheaper and thus secure a higher share of the global export market for Taiwan, they said. The U.S. dollar opened at NT$30.060 and moved between NT$29.891 and NT$30.065 before the close. Turnover totaled US$1.392 billion during the trading session. The U.S. currency came under downward pressure during the morning session, but started to make a comeback soon after the local foreign exchange opened for the afternoon session, dealers said. The reversal reflected massive selling by foreign institutional investors in the local bourse amid escalating fears that the United States Federal Reserve will soon stop its quantitative easing, dealers said. Foreign institutional investors sold NT$8.16 billion (US$272 million) net worth of local shares, in particular large-cap stocks, which helped send the weighted index 1.91 percent lower. The Fed sent mixed messages overnight on a possible halt of its fund injection program, in which the U.S. central bank has been buying US$85 billion worth of government bonds and mortgage-backed securities per month to boost the economy. The mixed messages raised concerns over a possible change of course by the Fed, which affected several major regional markets such as Taipei, Tokyo, Hong Kong and Singapore. The effort by the U.S. Fed to pump huge funds into the market has created a spillover effect in the region and lifted value of the regional currencies. The region's central banks have been trying to depress their currencies in a bid to strengthen their countries' global competitiveness. China's worse-than-expected manufacturing activity in May also led traders here to move funds out of the Taiwan dollar amid concerns over the regional economy, dealers said. The local central bank stepped in, as it has done recently, to bolster the U.S. dollar in an attempt to push up the unit above the NT$30.00 level by the end of the session, they said. (By Stacy Wu and Frances Huang)


Updated : 2021-01-20 15:55 GMT+08:00