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

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

Taipei, Feb. 21 (CNA) The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.003 to close at the day's high of NT$30.395 as the greenback recouped earlier losses to end in positive territory on the back of local central bank intervention, dealers said. The central bank's presence offset selling in the U.S. dollar, which came under downward pressure due to a large net buy by foreign institutional investors in the local bourse, the dealers said. The greenback opened at NT$30.390 and moved to a low of NT$30.280 before rebounding. Turnover totaled US$802 million during the trading session. The U.S. dollar opened lower as traders pocketed gains generated a day earlier, and selling in the greenback increased in the wake of strong buying by foreign investors in the local equity market, the dealers said. Encouraged by an uptrend on Wall Street overnight, foreign institutional investors bought a net NT$10.36 billion (US$340.85 million)-worth of local shares on the Taiwan Stock Exchange, where the weighted index closed up 0.9 percent at 8,601.86 points. The weakness of regional currencies, in particular the South Korean won, let some air out of the Taiwan dollar even ahead of the central bank's intervention amid worries over the regional economic recovery, the dealers said. Concerns over economic fundamentals have been raised by weakening manufacturing activity in China, they said. According to HSBC Holdings and Markit Economics, the purchasing managers' index in China fell to 48.3 in February from 49.5 seen in January. The February data fell to a seven-month low. In the late trading session, the central bank stepped in, as it has done in recent months, buying into the U.S. dollar to slow the pace of the Taiwan dollar's appreciation, the dealers said. The central bank's efforts to keep the Taiwan dollar cheap is very likely to continue, in particular after Taiwan reported disappointing export orders data for January, which showed a 2.8 percent drop from a year earlier, ending a six-month gaining streak. (By Kao Chao-fen and Frances Huang)