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U.S. dollar closes higher on Taipei forex

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Gaining NT$0.042 against the Taiwan Dollar for the third time in a row, the US Dollar closed at NT$30.182 on the Taipei Forex.

The U.S. dollar rose against the Taiwan dollar, gaining NT$0.042 to close at NT$30.182 in a quiet session ahead of the release of April job data in the United States later in the day, dealers said.

Despite relatively low turnover, the U.S. dollar increased its gains throughout the day to close higher against the Taiwan dollar for the third session in a row amid growing expectations that the U.S. Federal Reserve will raise interest rates in June, they said.

The greenback opened at the day’s low of NT$30.100, and moved to the day’s high of NT$30.195 before the close. Turnover totaled US$604 million.

The U.S. dollar opened the day trending lower against the Taiwan dollar on a mild correction from a session earlier, but regained its footing in anticipation of a Fed rate hike soon, dealers said.

In a statement released on Wednesday after a policymaking meeting, the Fed said it still believed the U.S. economy will grow at a faster pace for the rest of the year after a slow first quarter, which prompted speculation of a rate hike at the Fed’s next meeting in June.

The market was therefore focused Friday on the U.S. non-farm payroll report due later in the day, which was expected to provide some insight on how the Fed might adjust its monetary policy, they said.

In addition to the rate hike expectations, dealers said, the U.S. dollar also got a boost from foreign institutional selling in the stock market.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$970 million (US$32.14 million) in shares on the main exchange on Friday after a net buy of NT$4.95 billion in shares a session earlier.

Foreign institutional investor positions on the stock market give currency traders an indication of whether demand for the U.S. dollar is rising or falling, with net selling signaling more demand for the greenback.

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