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Reaching NT$29.935, dollar closes higher on Taipei forex

TAIPEI--The U.S. dollar rose against the Taiwan dollar Thursday, gaining NT$0.030 to close at the day's high of NT$29.935 as the greenback reversed its earlier losses on the back of buying from the local central bank, dealers said.

Despite the central bank's intervention, turnover on the local foreign exchange market remained moderate as many traders here preferred to stay on the sidelines, waiting for the June U.S. non-farm payroll data that was due later in the day, dealers said.

The greenback opened at NT$29.910, and moved to a low of NT$29.810 before rebounding. Turnover totaled US$660 million during the trading session.

The U.S. dollar opened higher on a mild technical rebound but was soon was dragged down by further fund inflows into the local equity market, which boosted demand for the Taiwan dollar throughout the session, dealers said.

As the local market continued to gain, closing above the 9,500 point mark with continued foreign institutional buying in large-cap electronics stocks, the U.S. dollar faced more downward pressure, dealers said.

The weighted index on the Taiwan Stock Exchange closed up 0.43 percent at 9,526.23 after foreign institutional investors bought NT$324.32 million (US$10.83 million) net worth of local shares.

The central bank stepped in, as it has done in almost every session recently to prop up the U.S. dollar, and helped push the U.S. unit back up to the NT$29.9 level at the close, dealers said.

The local foreign exchange market appeared generally quiet as many traders were waiting for the U.S job data for June, which could be an important indication of when the U.S. Federal Reserve might kick start a rate hike cycle, dealers said.

Paycheck processor ADP, a private U.S. organization, said overnight that private-sector payrolls increased by 281,000 in June, higher than an earlier market estimate, dealers noted.

Some traders here were reassured by Fed Chairwoman Janet Yellen's statement at the International Monetary Fund overnight that it was unnecessary for the Fed to shift its focus from supporting the economy to managing financial crisis, which indicated that the U.S. central bank would maintain ample liquidity.

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