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

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

The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.071 to close at the day's high of NT$32.903 amid cautious sentiment ahead of the conclusion of a policymaking meeting held by the European Central Bank (ECB), dealers said.

Taiwan's central bank continued its intervention to prop up the U.S. dollar, helping the currency recoup its earlier losses, in a bid to boost a market share for Taiwanese exporters in the global market, they said.

It was the fifth consecutive session for the U.S. dollar to move higher against the Taiwan dollar, forcing it to a new low in two weeks.

The greenback opened at NT$32.700, and moved to a low of NT$32.660 before rebounding. Turnover totaled US$1.14 billion during the trading session. The U.S. dollar opened down against the Taiwan dollar as traders here locked in their gains posted a day earlier on the back of the local central bank's intervention to boost the U.S. currency's value, dealers said.

Overnight, Washington reported the disappointing manufacturing activity data to drag down the U.S. dollar index, giving additional hints to traders here to dump the U.S. dollar and pick up the Taiwan dollar, they said.

The U.S. November manufacturing purchasing managers index (PMI) released by the Institute for Supply Management stood at 48.6, in contraction territory, and missed an earlier market expectation of 50.5. The latest PMI data was the worst since June 2009 and the first time the index fell below 50 in three years. The gains posted by the Taiwan dollar also resulted from a decision made by the People's Bank of China to raise the Chinese yuan's reference rate against the U.S. dollar. The yuan's movement has been closely tracked by traders here as Taiwan and China have built close economic ties, they added.

After falling in the early morning session, the U.S. dollar then entered consolidation mode, moving in a narrow range as traders at home kept alert over the ECB's monetary policy meeting scheduled to open later in the day, they said.

Many traders at home and abroad have expected that the ECB will further relax its monetary policy by pumping more funds into the market, a move which could create spill-over effects to the Asian region and give a boost to the regional currencies, including the Taiwan dollar, they added.

In the late trading session, the local central bank jumped into the market again to boost the turnover to more than US$1 billion by the end of the session, dealers said. (By Chiu Po-sheng and Frances Huang)

Updated : 2021-09-18 08:59 GMT+08:00