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

2012/05/17 18:20:57

Taipei, May 17 (CNA) The U.S. dollar fell against the Taiwan dollar Thursday, shedding NT$0.075 to close at NT$29.560 as the local currency regained steam in line with its counterparts in the region, dealers said.

The strength of the regional currencies was boosted after the U.S. Federal Reserve released its policy meeting minutes that implied itwill continue to ease liquidity to boost the economy, the delaers said.

The greenback opened at the day's high of NT$29.640 and moved to a low of NT$29.500 before rebounding. Turnover totaled US$674 million during the trading session.

The dealers said traders resumed buying in the Taiwan dollar on hopes that further liquidity-easing measures adopted by the U.S. Fed will create spill-over effects in Asia, lifting regional currencies.

According to the Fed meeting minutes, several members indicated that additional monetary policy accommodation could be necessary if the economic recovery loses momentum or the downside risks to the forecast become great enough.

The Fed comments meant that soon after the local foreign exchangemarket opened, many exporters were prompted to add to their Taiwandollar holdings and dump their U.S. dollars to lock in the gains postedby the greenback in the past few sessions, the dealers said.

They said a recovering South Korean won, which reversed a six-day losing streak, also gave a strong indication to local traders to buy into the Taiwan dollar after the Korean authorities vowed to use thecountry's large foreign exchange reserves to fend off financialvolatility caused by the European debt crisis.

In addition, a rebound in the local bourse placed further downward pressure on the greenback after foreign institutional investors bought shares with a net worth of NT$682 million (NT$23.07 million), they added.

However, the local central bank stepped in to shore up the U.S. dollar after it fell to NT$29.500 against the Taiwan dollar in abid to slow down the appreciation of the local currency and maintain the island's global competitiveness, the dealers said.

(By Kao Chao-fen and Frances Huang)