The Taiwan dollar firmed on Tuesday due to foreign fund inflows in the equity market and US subprime mortgage worries, which pressured the US currency, though importer deals capped gains. The Taiwan dollar ended stronger at T$32.758 to the US dollar from the previous close of T$32.790. It opened higher at T$32.740.
Volume on the main Taipei Forex Inc exchange was hefty at US $1.319 billion, up from US $809 million a day earlier. "Foreign fund inflows were very brisk today, which contributed to the huge volumes," said a dealer in Taipei. "However, importers were also actively buying US dollars and that's why the Taiwan dollar didn't manage to firm too much."
On Tuesday, Taiwan stocks ended 1.27 percent higher, with foreign institutions buying a net T$15.152 billion (US $462 million) in the island's shares, which helped support the local dollar.
Dealers said there was brisk US dollar buying in the market from importers, such as oil firms, insurers and fund companies that are putting their money in overseas investments. The US dollar fell to a two-month low against the yen amid US subprime mortgage woes. The Japanese yen firmed to 120.57/58 to the US dollar from 121.00/05 in the previous Asian trade.