The Taiwan dollar rose on Monday as exporters got rid of US dollars and the yen gained ground, though some foreign fund outflows that helped push stocks lower dampened sentiment in the forex market. The Taiwan dollar ended firmer at T$32.827 to the US dollar from Friday's close of T$32.861. The local currency had opened stronger at T$32.759.
Volume on the main Taipei Forex Inc exchange was US $896 million, lower than a hefty US $1.418 billion in the previous session. "Exporters were selling US dollars, but they weren't very aggressive. Some were making their US dollar offers at around T$32.87," said a dealer in Taipei. "The dominant factor is still the stock market, which is dampening sentiment today."
Exporters usually sell US dollars when the end of the month approaches to meet cash needs. The yen rose to 119.03/05 to the US dollar from 119.19/22 in previous Asian trade as investors cut back on risky positions such as carry trades, largely ignoring a crushing defeat by Japan's ruling party in upper house elections.
However, the US dollar managed to erase some losses during Monday's session ahead of a series of US economic indicators due later this week, including the widely watched non-farm payroll figures.
"Volumes were not that huge today. Investment firms aren't that active either," said another dealer in Taipei. Investment trusts have been actively putting their money overseas where returns are higher as Taiwan's interest rates remained low, causing outflows and pushing the Taiwan dollar lower.
On Monday, foreign institutions sold a record net T$27.778 billion (US $847 million) in Taiwan's stocks, which fell 0.98 percent. On the smaller Cosmos exchange, the Taiwan dollar rose to T$32.840 to the US dollar from the previous close of T$32.893.