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Greenback closes lower on Taipei forex on US Fed expectations

TAIPEI--The U.S. dollar fell against the Taiwan dollar Thursday, shedding NT$0.032 to close at NT$30.130 on expectations that the U.S. Federal Reserve will keep interest rates low for some time, dealers said.

Hopes of continued high liquidity prompted traders in the region to pick up regional currencies, in particular the South Korean won, which paved the way for buying in the Taiwan dollar and placed downward pressure on the U.S. currency, dealers said.

The U.S. dollar also faced selling as demand for the Taiwan dollar rose in reflection of further institutional buying in the local market, dealers said.

The greenback opened at NT$30.160, and moved between NT$29.910 and NT$30.169 before the close. Turnover totaled US$1.01 billion during the trading session.

The U.S. dollar opened lower and continued to lose momentum in the wake of the Fed's March policymaking meeting, which quelled market speculation about a sooner-than-expected increase in interest rates, dealers said.

Anticipating that the U.S. central bank will maintain high liquidity to support the economy, traders here rushed to pick up the won, which hit a new high since August 2008 at one point, dealers said.

The strength of the won encouraged buying in the Taiwan dollar and pushed the U.S. dollar below the NT$30 mark at one point during the trading session, they added.

In the local market, foreign institutional investors bought NT$4.66 billion (US$155 million) net worth of shares, which added downward pressure on the U.S. dollar, dealers said.

After the U.S. dollar fell below NT$30.00, bargain hunters jumped into the trading floor, which gave the greenback a boost, while the local central bank intervened, helping the unit recoup most of its earlier losses by the end of the session, dealers said.

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