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

Taipei, May 14 (CNA) The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.008 to close at the day's high of NT$30.220 after the greenback recouped earlier losses on the back of local central bank buying, dealers said. Before the central bank's support, the U.S. dollar trended lower against the Taiwan dollar, partly in reflection of foreign institutional buying in the local bourse, which boosted demand for the local currency, the dealers said. A rebound staged by the Chinese yuan also prompted traders to cut their U.S. dollar holdings in exchange for the Taiwan dollar throughout the session, they added. The greenback opened at NT$30.212 and moved to a low of NT$30.138 before rebounding. Turnover totaled US$618 million during the trading session. The U.S. dollar opened flat and soon fell into the red as traders took cues from gains posted by the local bourse, which was boosted by a fresh high on Wall Street overnight, the dealers said. With buying focusing on the bellwether electronics sector as well as the financial sector, the weighted index on the Taiwan Stock Exchange closed up 0.64 percent at the day's high of 8,875.16 after foreign institutional investors bought a net NT$7.72 billion (US$255 million)-worth of local shares. The yuan rose to a one-week high against the U.S. dollar at one point amid hopes that the Chinese authorities will come up with measures to boost their country's economy. The yuan's gains gave an indication to traders here to further raise their Taiwan dollar holdings, the dealers said. However, many traders in the region believed that the yuan's gains were simply technical in nature as investors largely took advantage of its recent slump, they said, adding that if the yuan becomes weaker again, other regional currencies might follow suit. The U.S. dollar moved lower against most of the currencies in the regional market after Washington reported disappointing retail sales data for April, the dealers said. In the late trading session, the local central bank stepped in, as it has done almost every session recently, to push the U.S. dollar back up to the NT$30.20 mark, the dealers said, adding that the moderate turnover made it easier for the central bank to intervene. (By Stacy Wu and Frances Huang)