The Taiwan dollar rose on Friday, ending a three-day losing streak, as foreign banks and exporters sold the US dollar, but the gain was tempered by weakness in the stock market as foreigners sold shares. The Taiwan dollar rose to an intraday high of T$33.041 against the US dollar in late trading.
But gave up some gains to close at T$33.079, still up from Thursday's finish of T$33.177, its lowest finish in two weeks. Volume on the main Taipei Forex Inc exchange was a light $725 million, down from $1.030 billion a day earlier. "The Taiwan dollar was boosted by a globally weaker US dollar last night, and some foreign banks were selling the US dollar," said a dealer at a local bank.
The US dollar fell against the euro on Thursday as a strong performance on Wall Street helped ease extreme risk aversion, reducing demand for safety. The Taiwan dollar was further propped up as exporters sold the US dollar.
Exporters, who prefer a weaker Taiwan dollar so they can convert their US dollar earnings to more of the local currency, traded as they feared the Taiwan dollar would gain too much, dealers said. However, the Taiwan dollar's rise was limited as Taiwan stocks gave up much of their gains early in the day to close 0.34 percent higher on Friday, with foreign institutions unloading a net T$3.6 billion ($109 million) worth of local shares.
Despite the day's rise, the Taiwan dollar has lost about 10 percent since hitting a 10-1/2-year high in late March, largely due to fund outflows. Dealers said they still expected the Taiwan dollar to be on a downward trend and to test as low as T$33.2 next week. On the smaller Cosmos exchange, the Taiwan dollar rose to T$33.075 to the US dollar, from the previous close of T$33.180.