U.S. dollar closes lower on Taipei forex (update)
Central News Agency
2014-02-26 05:31 PM
Taipei, Feb. 26 (CNA) The U.S. dollar fell against the Taiwan dollar Wednesday, shedding NT$0.052 to close at NT$30.350 as traders here were encouraged by the strength of the South Korean won to pick up the local currency, dealers said. A net buy posted by foreign institutional investors in the local bourse boosted demand for the Taiwan dollar and added downward pressure on the greenback throughout the session, the dealers said. The losses incurred by the U.S. dollar were limited by the local central bank's continued efforts to prop up the U.S. currency in a bid to slow the pace of the Taiwan dollar's appreciation, they added. The greenback opened at the day's high of NT$30.405 and moved to a low of NT$30.270 before the close. Turnover totaled US$667 million during the trading session. The U.S. dollar opened higher on a mild technical rebound, but selling set in in the wake of a technical rebound staged by the won to push down the U.S. unit into negative territory, the dealers said. The won had suffered heavy selling in the past few sessions in reflection of a dive in the Chinese yuan after the People's Bank of China, the country's central bank, repeatedly lowered the reference rate for the yuan in exchange for the U.S. dollar to quell speculative buying in its currency, they said. The South Korean currency, which was also lifted by buying from that country's exporters, bounced back, which gave an indication to traders in the local foreign exchange market to raise their Taiwan dollar holdings, the dealers added. Selling in the U.S. dollar escalated since foreign institutional investors served as net buyers of NT$6.94 billion (US$229 million)- worth of local shares, in particular high-priced tech stocks, to push the weighted index on the Taiwan Stock Exchange up 0.29 percent, the dealers said. In the latter part of the session, the U.S. dollar fell below the NT$30.30 mark, which sparked local central bank intervention, helping the greenback to recoup most of its earlier losses by the close, they said. Despite the central bank's buying, turnover in the local foreign exchange market remained moderate amid cautious sentiment toward whether China's central bank will continue to cut the yuan reference rate, the dealers said. (By Stacy Wu and Frances Huang)
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