The Taiwan dollar weakened on Monday, after hitting a three-month high on Friday, due to foreign fund outflows as the stock market fell. Investors were also prompted to take profit in risky assets after Wall Street ended five days of gains in the previous session and cover short positions on the greenback after it rebounded from a one-year low.
The local currency, which rose for seven straight sessions, had briefly hit an intraday high of T$32.566, but pared earlier gains to close at T$32.668. "The Taiwan dollar weakened as a decline in the local stock market prompted investors to take profit in their risky assets," said a dealer in Taipei, who forecast the Taiwan dollar to trade mainly between T$32.50 and T$32.80 this week.
"The local currency was further pressured by a bout of short covering on the US dollar." Foreign institutions turned net sellers of Taiwan stocks for the first time this month, selling a net T$2.4 billion ($73 million) worth of Taiwan stocks, which ended 1.09 percent lower on Monday. Volume was light as traders were wary of central bank intervention.
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