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

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

Taipei, Jan. 8 (CNA) The U.S. dollar fell against the Taiwan dollar Wednesday, shedding NT$0.075 to close at NT$30.240 as traders were influenced by the strength of the South Korean won to buy into the local currency, dealers said. The decline of the U.S. dollar in the local foreign exchange market was limited, however, by the local central bank, which entered the trading floor late in the session to help the greenback recoup most of its earlier losses by the end of the session, they said. The U.S. dollar's depreciation ended a four-session winning streak against the Taiwan dollar enjoyed by the currency. The greenback opened at NT$30.315, and moved between NT$30.050 and NT$30.320 before the close. Turnover totaled US$755 million during the trading session. The U.S. dollar opened flat, but selling set in to push the unit into negative territory in the wake of a rebound staged by the won, dealers said.
The won had risen 0.4 percent against the U.S. dollar at one point during the day on a technical rebound from an eight-week low seen Tuesday as Korean exporters sold the greenback in exchange for the won to lock in a preferable exchange rate, they said. In recent sessions, the won had faced heavy downward pressure on expectations that the Bank of Korea would inject funds into the market, a move which could send the won lower. Engaged in a currency depreciation competition with South Korea, Taiwan's central bank aggressively intervened in the local foreign exchange market by buying the U.S. dollar and pushing the Taiwan dollar lower, dealers said. The gains posted by the won against the U.S. dollar made it easier for the central bank to intervene to prop up the greenback, dealers said, citing the day's relatively low turnover. To revive Taiwan's exports, the central bank is expected to continue its efforts to keep the Taiwan dollar relatively cheaper, in particular as the won heads lower. Taiwan's exports fell 1.9 percent from a year earlier in December and rose only 0.7 percent year-on-year for 2013 as a whole, according to government statistics. (By Kao Chao-fen and Frances Huang)