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

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

Taipei, Sept. 25 (CNA) The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.032 to close at the day's high of NT$33.292 after the central bank cut its key interest rates a day earlier following a 16-quarter freeze, dealers said. The central bank continued its intervention to keep the greenback below the NT$33 level in a bid to raise the country's global competitive edge, the dealers said. It was the third consecutive session in which the U.S. dollar closed above the NT$33 mark, with the currency closing at a six- and-a-half-year high. The greenback opened at NT$33.270 and moved to a low of NT$32.998 before rebounding. Turnover totaled US$1.16 billion during the trading session. The U.S. dollar opened higher against the Taiwan dollar in the wake of the interest rate cut by the central bank, but soon encountered downward pressure as traders here pocketed their earlier gains, the dealers said.
They added that the higher offshore rate of the Chinese yuan against the U.S. dollar also prompted the local currency to rebound. After the rate cut, more and more traders have anticipated that the Taiwan dollar will trend lower further against the U.S. dollar in the near future. In the latest rate cut, the benchmark discount rate was cut by 0.125 percentage points to 1.750 percent, effective from that day. The rate cut aims to stimulate the local economy, as many market observers have said that Taiwan will struggle to maintain its economic growth at 1 percent in 2015. In addition, hopes that the U.S. Federal Reserve will raise interest rates will place more pressure on regional currencies, including the Taiwan dollar and the South Korean won, in the near future, the dealers said. Anticipation of a rate hike by the U.S. Fed have been reinforced by a speech delivered by Fed Chair Janet Yellen, who said a day earlier that the U.S. central bank remains on track to raise interest rates by the end of this year. In the late trading session, the local central bank jumped onto the trading floor again to dump its holdings in the Taiwan dollar at a time when a weaker won, which the local currency tracks closely, prompted the bank to intervene to make the local currency cheaper, the dealers said. (By Chiu Po-sheng and Frances Huang)


Updated : 2021-04-21 07:14 GMT+08:00