US. dollar closes lower on Taipei forex (update) | Economics | FOCUS TAIWAN - CNA ENGLISH NEWS

US. dollar closes lower on Taipei forex (update) | Economics | FOCUS TAIWAN - CNA ENGLISH NEWS:

Taipei, July 4 (CNA) The U.S. dollar fell against the Taiwan dollar Thursday, shedding NT$0.103 to close at NT$30.199 on buying by foreign banks in the wake of a rebound staged by other regional currencies, in particular the South Korean won, dealers said.

The local central bank intervened toward the end of the session, as it has done in recent sessions, to help the greenback recoup some of its earlier losses in a bid to slow the pace of the Taiwan dollar's appreciation, they said.

Despite the central bank's intervention, turnover in the local foreign exchange market remained thin, as many investors stayed on the sidelines ahead of the conclusion of a policymaking meeting of the European Central Bank later in the day, the dealers added.

The U.S. dollar opened at NT$30.302 and moved between NT$30.015 and NT$30.305 before the close. Turnover totaled US$495 million during the trading session.

Selling in the greenback emerged soon after the local foreign exchange market opened, with foreign banks rushing to cut their holdings in the currency by taking advantage of the gains posted by the unit in the past two sessions, the dealers said.

The strength of other regional currencies also encouraged foreign banks to buy the Taiwan dollar, a move that added downward pressure on the U.S. dollar throughout the session, they said.

The rising won served as a clear indication to traders here to buy into the Taiwan dollar after Goldman Sachs said in a report that the South Korean currency will gain against the U.S. dollar over the next three months, the dealers said.

The stronger won also reflected a promise by the Seoul authorities to come up with measures to create jobs in the service sector and enhance the country's global competitiveness in a bid to boost its economy, they said.

Gains posted by the Chinese yuan also led traders in the local market to raise their Taiwan dollar holdings after the People's Bank of China hiked the reference rate for the yuan against the U.S. dollar, they added.

Trading volume in the local foreign exchange market was thin, as many traders took to the sidelines waiting to see what the ECB will decide on its monetary policy after its policymaking meeting, the dealers said.

The ECB meeting has been watched closely, as investors fear that political tension in debt-ridden Portugal could complicate the debt situation in the eurozone, they said.