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

2014/01/07 17:35:22

Taipei, Jan. 7 (CNA) The U.S. dollar rose against the Taiwan dollar Tuesday, gaining NT$0.08 to close at NT$30.315, continuing momentum seen a session earlier as the local central bank further propped up U.S. currency, dealers said.

The move by the central bank to buy into the U.S. dollar and boost the Taiwan dollar's global competitiveness came as South Korea's won also saw significant depreciation, they said.

The greenback opened at NT$30.260 and moved between NT$30.035 and NT$30.350 before the close. Turnover totaled US$1.03 billion during the trading session.

Earlier in the day, the U.S. dollar opened lower as traders locked in the significant gains posted Monday -- the highest the U.S. dollar has closed against the Taiwan dollar since July 8 -- on the back of the central bank's buying into a currency depreciation competition against South Korea, dealers said.

Monday's highpoint came amid expectations that the Bank of Korea will relax its monetary policy in a meeting scheduled for later in the week, a move could send the won lower.

After initial weakness in Tuesday's session, downward pressure on the U.S. dollar in the Taiwan foreign exchange market escalated as foreign institutional buying in the local bourse gave a further boost to demand for the local currency, dealers said.

Foreign institutional investors served as net buyers of NT$1.03 billion (US$33.98 million) worth of local shares on the Taiwan Stock Exchange, where the benchmark weighted index closed up 0.14 percent at 8,512.30 points.

In the late session, the local central bank stepped in as it has done in recent sessions to help the U.S. dollar reverse earlier losses amid fears that a falling won will hurt Taiwan's exports, which largely overlap with outbound shipments from Seoul, dealers said.

As long as the won continues a downtrend, the local central bank is likely to intensify its efforts in intervention to drag down the Taiwan dollar since local business leaders, such as Taiwan Semiconductor Manufacturing Co. Chairman Morris Chang, have been urging the bank to further depreciate the local currency, they said.

(By Kao Chao-fen and Frances Huang)