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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 Thursday, shedding NT$0.098 to close at NT$33.002 as Taiwanese exporters rushed to raise their holdings in the local currency to meet year-end fund demand, dealers said.

The strength of other regional currencies and foreign institutional buying in the local equity market placed more downward pressure on the U.S. dollar before Taiwan's central bank jumped into the market, helping the U.S. unit recoup most of its earlier losses by the close, the dealers said.

The greenback opened at NT$32.820 and moved between NT$32.765 and NT$33.002 before the close. Turnover totaled US$490 million during the trading session.

The U.S. dollar opened higher against the Taiwan dollar as traders here took cues from an increase in seasonal fund demand by local exporters as the year comes to an end, the dealers said.

Such year-end fund demand is expected to continue, lending more support to the Taiwan dollar and pushing down the greenback over the next few sessions, they said.

Selling in the U.S. dollar continued in the wake of gains posted by other regional currencies, in particular the South Korean won, which traders here follow closely before mapping out their strategies for trading in the Taiwan dollar, the dealers said.

The won, which rose 0.85 percent against the U.S. dollar at one point, got lifted by similar year-end fund demands from South Korean exporters, while the South Korean currency was also boosted by a move by Moody's Investors Service to hike Seoul's credit ratings. A higher won prompted traders here to chase the Taiwan dollar, the dealers said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$3 billion (US$90.90 million)-worth of shares on the local main board, with the weighted index closing up 0.1 percent.

The dealers said that foreign buying in equities pushed down the U.S. dollar further before the local central bank's intervention.

After witnessing the U.S. dollar falling below the NT$32.8 level, the central bank made its intervention more visible, vaulting the greenback back to the NT$33 mark by the close, the dealers said.

It was the sixth consecutive session in which the U.S. dollar had closed above the NT$33 level on the back of the central bank's support, and the level is believed to be the bank's bottom line in the short term.

Despite the central bank's buying, trading volume in the local foreign exchange market remained thin as many foreign traders were away for the Christmas holiday, the dealers said. (By Chiu Po-sheng and Frances Huang)


Updated : 2021-09-19 11:37 GMT+08:00