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

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

Taipei, Dec. 23 (CNA) The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.010 to close at the day's high of NT$33.100 as intervention from Taiwan's central bank offset the impact on the U.S. dollar resulting from foreign fund inflows, dealers said.

Before the presence of the local central bank, the U.S. dollar also came under pressure as traders here took cues from the strength of other regional currencies, while seasonal fund demand added more selling in the U.S. unit, the dealers said.

The greenback opened at NT$32.830 and moved to a low of NT$32.760 before rebounding. Turnover totaled NT$537 million during the trading session.

The U.S. dollar opened down against the Taiwan dollar in the wake of fund inflows by foreign institutional investors, and the strength continued to push down the U.S. unit further during the session, the dealers said. With many foreign fund managers away for the Christmas holiday, some other foreign institutional investors moved their funds into the local equity market to hunt bargains, a move that gave a boost to the Taiwan dollar, the dealers said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$3.81 billion (US$115 million)-worth of shares on the local main board, sending the weighted index up 0.28 percent at the close Wednesday.

The losses incurred by the U.S. dollar also reflected a move by local exporters to raise their holdings in the Taiwan dollar to meet fund demand with the current year approaching an end, the dealers said.

Such seasonal fund demand also appeared in other regional markets to boost other regional currencies such as the South Korean won, giving more hints to traders here to dump more of their U.S. dollars, pushing the greenback down to a level below NT$33, they said.

In the late trading session, the local central bank's intervention became more visible in a bid to prop up the U.S. dollar and vault the currency back to the NT$33 mark at the close. It was the fifth consecutive session in which the U.S. dollar had ended above NT$33, a level the market believes the local central bank wants to maintain. (By Chiu Po-sheng and Frances Huang)

Updated : 2021-09-17 09:58 GMT+08:00