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

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

Taipei, July 26 (CNA) The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.042 to close at NT$30.402 as traders here took cues from the weakness of other regional currencies to cut their holdings in the local unit, dealers said.

Continued fund outflows and foreign institutional selling in local equities also boosted the U.S. dollar, leading the Taiwan dollar to move lower for the second consecutive session, dealers said.

The greenback opened at NT$30.360, and moved between NT$30.350 and NT$30.440 before the close. Turnover totaled US$562 million during the trading session.

The U.S. dollar opened flat against the Taiwan dollar, but soon picked momentum as regional currencies weakened against the greenback, dealers said.

The drop in the regional currencies reflected a continued rise of the U.S. dollar index, which tracks the currencies of the U.S.' six major trading partners, dealers said.

The South Korean won, which the Taiwan dollar closely follows, was one the regional currencies that moved higher, giving a strong hint to traders here to dump the local currency, dealers said.

Meanwhile, foreign investors continued to repatriate funds after receiving cash dividends from their investments in the local equity market in the current dividend season, dealers said.

Several large-cap listed companies such as Fubon Financial Holding Co. (富邦金) and power supply management solution provider Delta Electronics Inc. (台達電) are scheduled to issue their cash dividends later in the week, which might result in a continued flight of funds out of Taiwan, dealers said.

In addition, foreign institutional investors shifted to the sell side in the local equity market Wednesday, selling a net NT$2.54 billion (US$83.55 million) worth of shares on the main board, which placed more pressure on the Taiwan dollar, dealers said.

Turnover in the local foreign exchange market remained moderate, with many traders staying on the sidelines, waiting for the conclusion of the U.S. Federal Reserve's two-day policymaking meeting later in the day.

(By Chiu Po-sheng and Frances Huang)enditem/pc

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