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

2017/12/13 20:18:11

CNA file photo

Taipei, Dec. 13 (CNA) The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.008 to close at NT$30.026, after a quiet session ahead of the outcome a two-day monetary policy meeting of the U.S. Federal Reserve later in the day, dealers said.

Continued foreign institutional selling of local equities placed downward pressure on the Taiwan dollar, which boosted the U.S. dollar to its highest since Dec. 6, when the U.S. currency stood at NT$30.036 against the Taiwan dollar, they said.

The greenback opened at NT$30.040, and moved between NT$30.015 and NT$30.060 before the close. Turnover totaled US$518 million during the trading session.

Soon after the local foreign exchange market opened, the U.S. dollar moved higher on expectations that the Fed will announce a rate hike after wrapping up its meeting later in the day, dealers said.

The expected rate hike at the Fed prompted traders in the region to move their funds to U.S. dollar-denominated assets by dumping regional currencies, including the Taiwan dollar, they said.

However, buying in the U.S. dollar was limited as many local traders were still waiting for the press conference after the Fed meeting for more clues about the U.S. economy, which could dictate the Fed's approach to adjusting monetary policy, dealers said.

While trading was light on the local foreign exchange market, the Taiwan dollar came under pressure as foreign institutional investors continued to sell equities on the local market, dealers added.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$1.24 billion (US$41.33 million) in equities on the main board on Wednesday, the 14th consecutive session in which their value of shares sold topped that of shares bought.

The weakness of the South Korean won against the U.S. dollar due to foreign fund outflows also encouraged local traders to cut their holdings in the Taiwan dollar.

(By Chiu Po-sheng and Frances Huang)