The Taiwan dollar reversed early gains on Friday to close weaker for a second straight day as the central bank's purchase of US dollars reversed foreign fund inflows that had kept the local currency in positive territory. The Taiwan dollar closed at T$33.750, reversing course in the final minutes of trade after having hit a high of T$33.631 in early trade.
The local currency closed at T$33.705 on Thursday. Volume on the main Taipei Forex Inc exchange was thin at $744 million, but higher than Thursday's $588 million. "If you ignore the final 30 minutes of trade where there was clearly some intervention by the central bank, we saw lots of foreign investors snapping up Taiwan dollars for most of the day," said a dealer in Taipei.
Foreign investors bought a total of T$6.45 billion ($191 million) worth of Taiwan stocks on Friday, bringing their total net purchase this month to T$4.34 billion. Taiwan stocks rose more than 2 percent on Friday, their highest finish in three weeks, increasing investor risk appetites and leading to an outflow from safe havens such as the US dollar.