Taipei, Sept. 13 (CNA) The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.03 to close at NT$29.699 as further efforts from the local central bank to boost the value of the greenback reversed the unit's early losses by the end of the session, dealers said.
The intervention ended a five-session losing streak for the U.S. dollar against the Taiwan dollar, they said.
Despite the central bank's intervention, turnover remained moderate as many investors took to the sidelines, nervously waiting for the conclusion of a two-day policymaking meeting of the U.S. Federal Reserve which will end later in the day, they added.
The U.S. dollar opened at NT$29.670, and moved between NT$29.571 and NT$29.702 before the close. Turnover totaled US$642 million during the trading session.
The Taiwan dollar continued its strength against the U.S. dollar soon after the local foreign exchange market opened as foreign banks kept cutting their U.S. currency positions, betting the U.S. Fed will come up with further stimulus measures, dealers said.
A ruling issued by the constitutional court in Germany to ratify the European Stability Mechanism (ESM), a 500 billion euro (US$645 billion) bailout fund in Europe, boosted buying in the euro, they said.
The ratification of the ESM made many traders relieved to some extent and raised optimism toward the debt situation in the eurozone, dealers said.
A rising euro, which hit a four-month high against the U.S. dollar, gave a hint to traders here to buy into the Taiwan dollar before the central bank's intervention, they said.
The daily turnover in the local foreign exchange, however, fell from a session earlier as many traders still preferred to stay on the sidelines, watching closely whether the U.S. central bank will launch a third round of quantitative easing to boost the economy, dealers said.
They said the local central bank is expected to continue to slow down the pace of the Taiwan dollar's appreciation against the U.S. dollar in a bid to make local goods cheaper in the global markets.
(By Kao Chao-fen and Frances Huang)