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

2012/05/03 17:35:09

Taipei, May 3 (CNA) The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.026 to close at the day's high of NT$29.266, as the local currency weakened in reflection of a falling euro after Europe reported higher unemployment, dealers said.

Traders also turned cautious about the regional currencies, taking cues from the worse-than-expected job data in the U.S. private sector, which cast a shadow over the world's economic fundamentals, dealers said.

The greenback opened at NT$29.250 and moved to a low of NT$29.174 before rebounding. Turnover totaled US$808 million during the trading session.

The weakness of the European common currency gave traders in Taiwan a strong indication to lower their Taiwan dollar holdings soon after the local foreign exchange market opened, dealers said.

The euro fell for the third consecutive day against the U.S. dollar after the European Union announced a higher employment rate of 10.9 percent in March.

Dealers said the poor job data in Europe led traders to think the ongoing financial crisis in the region would further impact the job market and even the overall economic conditions.

Furthermore, tepid job growth data in the U.S. private sector for April further dampened market sentiment toward the global economy, dealers said.

Weak confidence in the world economy propelled traders to move their funds out of the equity markets, including Taiwan, to the U.S. dollar as a safe haven, dealers added.

The local bourse closed down 0.22 percent, at 7,659.53 points, although foreign institutional investors bought NT$196 million (US$6.70 million) net worth of shares during the trading session.

Dealers said the U.S. dollar is expected to move in a narrow range against the Taiwan dollar ahead of a run-off in the French presidential election.

(By Stacy Wu and Frances Huang)
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