The Taiwan dollar ended barely changed on Monday as short-covering in the US dollar in the non-deliverable forwards market was roughly offset by exporters and some foreign buying in the equity market. The Taiwan dollar ended slightly weaker at T$30.288 to the US dollar from Friday's close of T$30.284. The local currency opened weaker at T$30.315.
Volume on the main Taipei Forex Inc exchange was thin at $912 million, down from $973 million a day earlier."There was some short-covering in the US dollar in the NDFs market. But the central bank and exporters selling US dollars kept the trading range tight," said a dealer in Taipei.
The US dollar rose towards a seven-week high against the yen after Citigroup's earnings sparked expectations that the worst of bank losses stemming from the US housing sector are now out.
That prompted some investors to cover their short positions in the US dollar in the NDFs market. Six-month NDFs were quoted at -0.820/-0.770, compared with -0.900/-0.850 on Friday, indicating that the Taiwan dollar will strengthen by a smaller degree in half a year.
The Taiwan dollar has firmed 6.6 percent since the beginning of the year as the market was expecting the economy to improve after the China-friendly Nationalist Party won the presidential and legislative elections this year. The main TAIEX stock market rose 0.1 percent on Monday, helping to support the Taiwan dollar.
On Monday, foreign institutions bought a net T$5.647 billion ($186 million) in Taiwan stocks, bringing the total net purchase to T$10.086 billion for the month of April.
Dealers said they expected the Taiwan dollar to trade mainly between 30.2 to 30.4 in the short term. On the smaller Cosmos exchange, the Taiwan dollar ended at T$30.271 to the US dollar, also little changed from Friday's close of T$30.278.
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