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

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

Taipei, Aug. 13 (CNA) The U.S. dollar rose against the Taiwan dollar Tuesday, gaining NT$0.022 to close at NT$30.002 after moving in a narrow range, ahead of U.S. retail sales data that was due later in the day, dealers said. Turnover remained thin as many investors stayed on the sidelines, waiting for further economic data from the U.S. for clearer indications of the U.S. Federal Reserve's plan for its current massive liquidity easing program, dealers said. The local central bank jumped onto the trading floor late in the session, helping to push the greenback above the previous closing level against the Taiwan dollar in a bid to maintain Taiwan's global competitiveness, dealers said. It was the first time since Aug. 7 that the greenback closed above the NT$30 mark against the Taiwan dollar. The greenback opened at the day's high of NT$30.030, and moved to a low of NT$29.940 before rebounding. Turnover totaled US$513 million during the trading session. The U.S. dollar gained momentum soon after the local foreign exchange market opened, as traders here took cues from the weakness of the Japanese yen and South Korean won to dump the Taiwan dollar, dealers said. While many traders in the local market took to the sidelines, waiting for the U.S. retail sales data for July, the yen and won dropped lower on expectations that the U.S. Commerce Department will report an increase in sales for the fourth consecutive month, dealers said. This placed downward pressure on the Taiwan dollar in the early session, they added. Many traders in the region expect that an improvement in U.S. retail sales will lead to an early exit by the Fed from its monthly US$85 billion bond buying plan, a move that could depress the currencies in the region as liquidity would shrink, dealers said. The earlier gains posted by the U.S. dollar against the Taiwan dollar were reversed by a rising local bourse in which foreign institutional investors bought NT$5.03 billion (US$168 million) net worth of local shares, in particular high-tech stocks, dealers said. The local central bank's presence, however, helped the greenback recoup the losses and close in positive territory at the end of the session, they said. (By Kao Chao-fen and Frances Huang)