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U.S. dollar closes lower on Taipei forex

U.S. dollar closes lower on Taipei forex

The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.040 to close at NT$33.026 on thin trading volume ahead of a policymaking meeting of the U.S. Federal Reserve scheduled for Dec. 15-16, dealers said.

Taiwan's central bank entered the market again, helping the U.S. dollar recoup most of its earlier losses, in a bid to boost Taiwan's exports at a time of slowing global demand, the dealers said.

The greenback opened at NT$32.850 and moved between NT$32.782 and NT$33.026 before the close. Turnover totaled US$534 million during the trading session.

The U.S. dollar opened lower against the Taiwan dollar as traders here locked in their gains posted for the U.S. currency a session earlier on the back of the local central bank's intervention, the dealers said.

The selling in the U.S. dollar also reflected the strength of other currencies in the region such as the Japanese yen, as traders here picked up the local unit, placing pressure on the greenback, they said.

After the early decline, the U.S. dollar kept moving in a narrow range for the rest of the session as many traders took to the sidelines before the Fed launched its two-day policymaking meeting later in the day, the dealers said. In the wake of recent strong economic data, in particular a better-than-expected job report for November in Washington, the market has widely anticipated that the Fed will start to raise interest rates in the upcoming meeting, they said.

However, until the conclusion of the Fed meeting, traders preferred to remain cautious for the moment, which dragged down turnover in the local foreign exchange market, the dealers added.

Even before the local central bank's intervention, the downturn in the U.S. dollar was capped to some extent after foreign institutional investors sold a net NT$5.53 billion (US$167 million)- worth of shares on the main board, the dealers said.

In the late trading session, the central bank made its presence felt, propping up the U.S. dollar to push up the currency back to the NT$33 mark, a level the market believes the bank wants to maintain. It was the second consecutive session in which the U.S. dollar closed above the NT$33 level. (By Frances Huang)

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