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

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

Taipei, Oct. 15 (CNA) The U.S. dollar fell against the Taiwan dollar Thursday, shedding NT$0.285 to close at NT$32.457 on rising hopes that the U.S. Federal Reserve would not kick off an interest rate hike cycle soon, dealers said. Such hopes were reinforced by the U.S.' disappointing retail sales and producer price index (PPI) that were released overnight, and prompted traders in the region to cut their U.S. dollar holdings, dealers said. Strong foreign institutional buying in the local equity market added downward pressure on the U.S. dollar before Taiwan's central bank stepped in to prop up the local currency, helping it to recover from its earlier losses by the close, dealers said. The greenback opened at NT$32.742, and moved between NT$32.217 and NT$32.750 before the close. Turnover totaled US$1.126 billion during the trading session. The U.S. dollar opened flat against the Taiwan dollar but soon encountered selling as traders here took hints from the worse-than- expected U.S. retail sales data and PPI, shifting to the sell side of the greenback and picking up the local currency, dealers said. Retail sales in the U.S. rose only 0.1 percent in September, short of an earlier market estimate of a 0.2 percent increase, indicating that the country's economic growth remained unstable, dealers said. The U.S. PPI fell 1.1 percent, the steepest decline in eight month, which led traders to think that the Fed would not rush to raise its key interest rates, dealers added. As a result, the U.S. dollar weakened in the region, giving a strong indication to traders here to buy into the Taiwan dollar, which in turn pushed the U.S. dollar lower, dealers said. The U.S. dollar was also dragged down by strong foreign institutional buying in local equities, dealers said. According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$11.44 billion (US$352 million) worth of shares on the local main board, helping the weighted index to rise 0.92 percent at the close Thursday. When the U.S. dollar fell below the NT$32.3 mark, the local central bank intensified its intervention efforts to slow down the pace of the Taiwan dollar's appreciation in a bid to protect Taiwan's exports, dealers said. (By Chiu Po-sheng and Frances Huang)


Updated : 2021-09-28 08:58 GMT+08:00