The Taiwan dollar weakened on Monday to a 1-month low on foreign capital outflows, as the local stock market fell in line with signs of weakness in the US mortgage market. Demand for US dollars for oil purchases also pressured the Taiwan dollar, which ended at T$32.888 to the US dollar, down from the previous close of T$32.871.
It had earlier fallen to T$32.920, it's lowest since June 21. "The range today was very narrow as there were certainly foreign capital outflows on the stock decline and also demand for US dollars for oil buys, but the central bank was also quite active," said a Taipei dealer. The central bank is often active in the market to smooth out fluctuations. The dealer predicted that trade would range between T$32.860 and T$32.920 on Tuesday.
The turnover on the main Taipei Forex Inc exchange was US $724 million up from US $689 million in the last session. Taiwan shares fell 1.28 percent on Monday, in line with losses on other Asian markets, tracking a decline on Wall Street and as financial shares dipped on concerns about the US subprime market.
On Monday, foreign institutions sold a net T$15.4 billion (US $468 million) in Taiwan stocks. Foreign institutions were active net sellers near the end of July and unloaded a net T$9.258 billion ($281.7 million) for the entire month.
The dollar fell to a 15-year low against other currencies on Monday, as speculation mounted in financial markets that rising credit market risk and softening US data would force a cut in US interest rates.
Comments
Comments are closed.