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

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

Taipei, Aug. 15 (CNA) The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.003 to close at the day's high of NT$30.035 after local central bank intervention helped the greenback recoup its earlier losses, dealers said. The closing level showed the central bank's intention to maintain the U.S. dollar above the NT$30 mark in a bid to strengthen Taiwan's global competitiveness, the dealers said. It was the third consecutive session in which the U.S. dollar had closed above that level. The U.S. currency opened at NT$30.030, and moved to a low of NT$29.953 before rebounding. Turnover totaled US$522 million during the trading session. Before the central bank's presence, the U.S. unit lost momentum soon after the local foreign exchange market opened as traders here took their cues from a rising Japanese yen and a higher Chinese yuan to buy into the Taiwan dollar, the dealers said. The yen regained its footing as concerns over a possible early exit by the U.S. Federal Reserve from its current monthly US$85 billion bond-buying were reduced to some extent after a Fed official spoke, according to the dealers. Federal Reserve Bank of St. Louis President James Bullard, who is a voting member at the Fed's policymaking committee, said in a speech that the U.S. central bank should be careful when deciding to change the course of its monetary policy. In the wake of Bullard's comments, many currency traders at home and abroad tended to think that the Fed needs more economic data before it decides to reduce its stimulus measures, the dealers said. In addition to the yen, the gains posted by the yuan also encouraged traders here to raise their Taiwan dollar holdings before the local central bank stepped in, the dealers said. The yuan was boosted by a move by the People's Bank of China to raise the reference rate for the currency in exchange for the U.S. dollar after a series of positive economic data. The dealers said the U.S. dollar is expected to continue in consolidation mode against the Taiwan dollar as the local central bank is reluctant to see any big swing of the two currencies to destabilize the local foreign exchange market. (By Stacy Wu and Frances Huang)