The Taiwan dollar fell on Wednesday as importers and insurers bought US dollars, although trade remained thin during the holiday season. The Taiwan dollar ended weaker at T$32.529 to the US dollar, down from the previous close of T$32.499. The local currency had opened slightly softer at T$32.504.
Volume on the main Taipei Forex Inc exchange was thin at US $590 million, although it was higher than US $408 million a day earlier. Dealers said trade was slow as some markets, including Hong Kong, were closed.
"There are importers, such as oil firms, in the market today," said a dealer in Taipei. "Exporters were also quite active selling US dollars at around T$32.52 and T$32.53." Importers usually need US dollars for overseas purchases, such as crude oil and other raw materials.
While exporters, who sell US dollars to meet their month- and year-end cash needs, were active during the session, some were only willing to sell the US currency at levels around T$32.550, dealers said. Foreign institutions were net buyers of Taiwan stocks for a sixth straight day on Wednesday, when they purchased a net T$1.504 billion (US $46 million) in the island's shares, which fell 0.13 percent.
A poor stock market performance has been a key factor behind the Taiwan dollar's weakening in December. Since the beginning of December, the Taiwan dollar has lost 0.8 percent, trimming its gain since the start of 2007 to just 0.2 percent. Dealers said Taiwan's financial markets were awaiting the verdict in presidential candidate Ma Ying-jeou's corruption case on Friday.
Taiwan's high court will decide on an appeal filed by prosecutors accusing Ma of misusing T$11.176 million (US $344,000) while serving as Taipei mayor, after a lower court exonerated him in August. On the smaller Cosmos exchange, the Taiwan dollar weakened to T$32.538 to the US dollar from the previous close of T$32.507.