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

2012/08/10 21:04:58

Taipei, Aug. 10 (CNA) The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.05 to close at the day's high of NT$29.990 as the local currency moved lower in line with its regional counterparts amid fresh concerns over the global demand, dealers said.

Fears over the world's economic fundamentals resurfaced after China, the world's second largest economy, reported worse-than-expected export growth for July, they said.

The greenback opened at NT$29.950, and moved to an early low of NT$29.810 before rebounding. Turnover totaled about US$732 million during the trading session.

Traders here took cues from the weakness of other regional currencies to cut their holdings in the Taiwan dollar after the disappointing export data reported by China, dealers said.

In July, China's exports rose a meager 1 percent from a year earlier, lower than the market expected, as the country witnessed its sales to the European Union fall 16.2 percent and export growth to the U.S. market slow to 0.6 percent from an increase of 10.6 percent recorded in June amid lingering debt problems in the eurozone.

The July export growth was the slowest since 2009, excluding seasonal factors come into play, such as the Lunar New Year holiday.

Dealers said China's July export growth data boosted concerns over the global economy after the market had been shocked by the country's slowing industrial output growth for the same month.

Several regional currencies, such as the Chinese yuan and the South Korean won, encountered downward pressure soon after the regional foreign exchange markets opened, paving the path for the Taiwan dollar to fall, they said.

However, foreign institutional investors continued buying in the local bourse, preventing the Taiwan dollar from further losses against the U.S. dollar by the end of the session, they added.

Foreign institutional investors served as net buyers of local shares worth NT$5.02 billion (US$167 million), while the benchmark weighted index closed up 0.09 percent, at 7,441.12 points.

(By Kao Chao-fen and Frances Huang)