The Taiwan dollar fell for a second straight session on Monday as foreign investors shunned risky assets because of weak US corporate results, but exporter deals limited the local currency's losses. "The US dollar has seen a rebound, prompting some investors to cover short positions on the greenback," said a dealer in Taipei, "But exporter deals and firmer local stocks helped curb losses."
Investor risk appetite decreased as lacklustre results from companies like Bank of America Corp and weaker consumer sentiment damped optimism on the strength of the global economic recovery. The Taiwan dollar also tracked losses on the South Korean won, which hit a near three-week low against the dollar on Monday.
Dealers said there was little intervention from Taiwan's central bank as the Taiwan dollar weakened, as the authorities prefer a weaker unit to help the island's exports.
The dealer said the Taiwan dollar could trade between T$32.200-T$32.400 for rest of the week. Despite the fall, dealers said investors continued to anticipate a further rise in emerging Asian currencies, including the Taiwan dollar in the long term as the global economy recovers, helping the region's economies.
In the offshore non-deliverable forwards (NDFs) market, six-month NDFs widened on Monday, indicating that the Taiwan dollar would likely firm by a larger degree in half a year.
Comments
Comments are closed.