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

2012/06/21 18:28:35

Taipei, June 21 (CNA) The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.024 to close at the day's high of NT$29.902 after the local central bank intervened to help the greenback reverse its early losses in a bid to strengthen the country's global competitiveness, dealers said.

Despite the earlier gains posted by the Taiwan dollar, turnover throughout the session remained thin amid concerns over slowing global demand, which has been affected by the lingering debt problems in the eurozone, they said.

The U.S. dollar opened at NT$29.880 and moved to a low of NT$29.730 before rebounding. Turnover totaled US$537 million during the trading session.

The central bank stepped in during late trading to buy U.S. dollars after witnessing the currency fall and move closer to the NT$29.700 level amid fears that Taiwan's exports would be further hampered by a stronger Taiwan dollar, the dealers said.

In May, the country's export orders, which are an indicator of shipments in the next one to three months, fell 3.04 percent from the corresponding period of last year. It was the third consecutive month for Taiwan to suffer a year-on-year decline in export orders.

Local enterprises have repeatedly called for the central bank to allow the local currency to depreciate against the U.S. dollar to boost Taiwan's exports.

Before the central bank intervention, the Taiwan dollar gained on follow-through buying, but these gains were offset to some extent by the weakness of other regional currencies such as the South Korean won and the Thai baht, the dealers said.

Market sentiment remained cautious toward the global economic fundamentals, in particular after the U.S. Federal Reserve cutovernight its forecast for 2012 U.S. economic growth from 2.9 percent to a range between 1.9 percent and 2.4 percent, they said.

The small trading volume also indicated that many traders preferred to stay on the sidelines ahead of the conclusion of a quarterly policymaking meeting by the central bank scheduled to take place later in the day, they added.

(By Kao Chao-fen and Frances Huang)