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

2012/05/25 17:38:56

Taipei, May 25 (CNA) The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.005 to close at the day's high of NT$29.650 after the local central bank intervened late in the session to help the greenback reverse its early losses, dealers said.

The greenback opened at NT$29.650 and moved to a low of NT$29.500 before rebounding. Turnover totaled US$997 million during the trading session.

The U.S. dollar rode its momentum from a session earlier soon after the local foreign exchange market opened, but profit taking ensued, dragging down the currency to the day's low, dealers said.

The weakness of the U.S. unit against the Taiwan dollar during much of the session came as foreign banks stood on the sell side to take advantage of the local currency's slide in recent sessions, dealers said.

A falling bourse at home, however, helped the U.S. dollar offset the downward pressure as foreign institutional investors sold a net NT$3.93 billion (US$133 million) in local shares, they said.

Foreign investors continued to cash out of Taiwan's stock market amid concerns that the escalating debt problems in Europe would further impact the global economy, dealers said.

Taiwan's central bank stepped in late in the session to help the U.S. dollar recoup its early losses, in particular after the U.S. dollar fell to the NT$29.50 level against the Taiwan dollar, in a bid to limit the appreciation of the local currency and keep its exports competitive, dealers said.

Market sentiment remained cautious because of the political situation in Greece, which will hold new parliamentary elections June 17 after being unable to form a coalition government to deal with its debt crisis following a May 6 vote, they said.

Without an immediate breakthrough in Europe's financial stalemate, the Taiwan dollar and its counterparts in the region are likely to follow the euro and remain weak in the near term, they added.

(By Kao Chao-fen and Frances Huang)