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US dollar closes higher on Taipei forex to finish the day's trade at NT$29.689

TAIPEI -- The U.S. dollar rose against the Taiwan dollar Friday, gaining NT$0.029 to close at NT$29.689 on thin turnover as many traders stayed on the sidelines, dealers said.

The caution reflected rising concerns that the U.S. Federal Reserve will announce a tapering of its monthly US$85 billion bond buying program after its next two-day policymaking meeting, which ends on Dec. 18, they said.

As it has done recently, Taiwan's central bank entered the market late in the session to prop up the U.S. dollar and help the currency recoup its earlier losses, they added.

The greenback opened at the day's high of NT$29.700 and moved to a low of NT$29.598 before rebounding. Turnover totaled US$414 million during the trading session.

The U.S. dollar opened slightly higher but selling from local exporters emerged to drag down the unit. It was only when the local central bank intervened later that the downtrend was reversed, dealers said.

Despite the central bank's intervention, trading volume was light as fears of a Fed pullback escalated. Those concerns were fueled after Washington released better-than-anticipated non-farm payroll data on Dec. 6 that showed more than 200,000 new jobs being added.

The worries were reinforced by higher-than-expected U.S. retail sales data released overnight that showed a 0.7 percent increase in retail sales in November, beating market expectations of a 0.6 percent rise, they said.

Before the intervention of Taiwan's central bank, foreign institutional selling in the local market let some air out of the Taiwan dollar, which traded higher during most of the session, dealers said.

Foreign institutional investors sold a net NT$1.01 billion (US$34.02 million) in local shares on the Taiwan Stock Exchange.

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