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

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

Taipei, July 23 (CNA) The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.100 to close at NT$31.452 as heavy losses on the local equity market placed downward pressure on the domestic currency, dealers said. Taiwan Semiconductor Manufacturing Co. (TSMC, ???) issued more than NT$100 billion (US$3.18 billion) in cash dividends to its shareholders, a move that prompted its foreign shareholders to send their funds out of the country, adding pressure on the Taiwan dollar, the dealers said. The local central bank seized the weakness of other regional currencies as a reason to further prop up the U.S. dollar in a bid to protect Taiwan's exports in the global market, they added. The greenback opened at NT$31.436 and moved between NT$31.210 and NT$31.460 before the close. Turnover totaled US$1.047 billion during the trading session. The U.S. dollar opened higher against the Taiwan dollar on follow-through buying from a session earlier, but traders here later shifted to the sell side to lock in their gains, pushing down the greenback, the dealers said. With the downturn in the local equity market escalating due to large foreign institutional selling, the U.S. dollar regained its strength on the back of rising demand, the dealers said. According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$5.93 billion-worth of shares on the local main board Thursday, sending the weighted index down 1.43 percent at the close. TSMC, the most heavily weighted stock in the local market, issued about NT$116.6 billion in cash dividends to shareholders Thursday. According to the dealers, since foreign institutional investors held a more- than 70 percent stake in the chip maker, the move to dole out dividends by TSMC paved the way for fund outflows out of the country, which led the Taiwan dollar to depreciate. The local central bank again stepped into the foreign exchange market to sell more of the Taiwan dollar and boost the U.S. dollar further after witnessing falls in other regional currencies, including the South Korean won, the dealers said. The fall in the currencies in the region reflected fears of an interest rate hike by the U.S. Federal Reserve later in the year, the dealers said, adding that after Washington reported overnight a rise in June property sales, such rate hike hopes have been reinforced. (By Frances Huang)


Updated : 2021-09-26 22:11 GMT+08:00