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

2012/05/11 17:36:11

Taipei, May 11 (CNA) The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.015 to close at NT$29.410 after moving in a narrow range amid lingering concerns over the debt problems in the eurozone, dealers said.

Political turmoil in Greece, stemming from the debt-ridden country's inability to form a coalition government after Sunday's parliamentary vote, continued sending ripples through global financial markets, they said.

The greenback opened at NT$29.420, and moved between NT$29.342 and NT$29.430 before the close. Turnover totaled US$751 million during the trading session.

The euro fell to a three-month low against the U.S. dollar overnight as Greece's political tensions and an upcoming bond auction in Italy weighed on market confidence.

The falling euro prompted traders to cut their holdings in Asian currencies and move their funds to the greenback as a safe haven, dealers said.

Slower-than-expected expansion in China's industrial production for April also boosted concerns over the pace of the economic growth in the region, they said.

Meanwhile, a steep drop in the local bourse added downward pressure on the Taiwan dollar, as foreign institutional investors sold a net NT$9.27 billion (US$315 million) in shares during the trading session, dealers said.

The sell-off was caused by the stunning US$2 billion in trading losses reported by U.S.-based investment bank JP Morgan. Many traders were worried about a possible domino effect that would lead to a new financial crisis, they said.

Those fears also kept many traders away from the market and moderated trading volume, dealers said.

(By Eva Feng and Frances Huang)