The Taiwan dollar traded largely flat on Friday as the central bank moved to offset mild gains from expectations of a sustained economic recovery in Asia despite new doubts about debt in Europe, dealers said. The island's central bank, which is keen to control rapid forex fluctuations and discourage market speculation, bought US dollars for a second straight session to cap gains in the local currency, dealers said.
The euro stabilised on Friday but remained under pressure after Greece said it could not achieve promised deficit cuts if its borrowing costs remained high. A weak euro could cause the US dollar to strengthen and reduce risk appeal in currencies such as the Taiwan dollar. The Taiwan dollar has climbed 0.94 percent this year but remained among the worst performers in Asia.