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

2012/06/20 17:24:27

Taipei, June 20 (CNA) The U.S. dollar fell against the Taiwan dollar Wednesday, shedding NT$0.012 to close at NT$29.878 as the local currency regained momentum in line with a rising euro after the leaders of the G20 nations pledged to take on the debt problems in the eurozone, dealers said.

Also on the back of the strength of its counterparts in Asia, the Taiwan dollar steamed ahead on expectations that the U.S. Federal Reserve will come up with further measures to boost the economy, the dealers said.

The greenback opened at NT$29.890 and moved between NT$29.750 and NT$29.929 before the close. Turnover totaled US$597 million during the trading session.

The G20 nations concluded a two-day meeting in Mexico that day with its European members promising to "take all necessary policy measures to safeguard the integrity and stability" of the euro currency union.

The pledge boosted the currency, which had been badly hit by lingering concerns over the financial situation in Europe, and traders in the region bought into regional currencies, including the Taiwan dollar, the dealers said.

The euro hit an almost one-month high overnight before retreating slightly.

In addition, the International Monetary Fund (IMF) said 12 more members had agreed to inject funds into the IMF to boost its financial resources to tackle the weakening global financial climate.

The move boosted confidence in the world's economic fundamentals and led traders to move their funds out of the U.S. dollar, the dealers said.

Meanwhile, hopes were raised that the U.S. Federal Reserve will pump more funds into the market by selling short term bonds and buying long term ones after concluding a two-day policymaking meeting that day, they said.

More and more traders were betting that the value of currencies in the region will be lifted on expectations that ample liquidity in the U.S. will create spill-over effects on Asia, they added.

(By Kao Chao-fen and Frances Huang)
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