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

2018/02/05 18:47:38

Taipei, Feb. 5 (CNA) The U.S. dollar rose against the Taiwan dollar Monday, gaining NT$0.072 to close at NT$29.307 on the back of a higher U.S. dollar index, which tracks the currencies of Washington's six major trading partners, dealers said.

Massive foreign institutional selling also contributed to the downturn of the Taiwan dollar, but the losses were capped as Taiwanese exporters sold their U.S. dollars for the Taiwan dollars to meet fund demands with the approach of the Lunar New Year holiday, the dealers said.

The greenback opened at the day's high of NT$29.420 and moved to a low of NT$29.260 before rebounding. Turnover totaled US$784 million during the trading session.

Soon after the local foreign exchange opened, the U.S. dollar got a significant boost to breach the NT$29.40 mark, rising NT$0.185, or 0.63 percent at one point against the Taiwan dollar, as traders here took cues from a rebound staged by the U.S. dollar index, the dealers said.

On Friday, the U.S. dollar index rose 0.6 percent amid rising hopes that the U.S. Federal Reserve will speed up its pace of carrying out a rate hike cycle for this year after Washington reported strong job data for January, they said.

Expectations about higher interest rates in the U.S. market spooked the equity markets on Wall Street, as well as the global markets, including Taiwan, where foreign institutional investors sold a net NT$8.34 billion (US$285 million)-worth of shares on the main board, sending the Taiex down 1.62 percent at Monday's close, the dealers said.

After noticing a plunge in the Taiwan dollar in the morning session, local exporters jumped onto the trading floor to sell the U.S. dollar in a bid to have more of the local currency to meet seasonal fund demand, the dealers added.

As a result, the U.S. dollar came off its early high by the end of the session, and the fund demand from local exporters is expected to continue ahead of the Lunar New Year holiday, which will start Feb. 15.

(By Frances Huang)