Search

Taiwan dlr rises on Korean won, smaller stock losses

Reuters - 1 hour 41 minutes ago

TAIPEI, Oct 13 - The Taiwan dollar <TWD=TP> closed higher on Monday after the Korean won rose sharply and as the local stock market recouped some losses in late trade after the Taiwan government announced new rules to boost stock prices.

The Taiwan dollar closed at T$32.388 to the U.S. dollar, compared with its Thursday final price of T$32.437. Taiwan's financial markets were closed on Friday for a public holiday.

Volume on the main Taipei Forex Inc exchange was active at $1.393 billion, rising from the previous session's $1.187 billion.

"The Taiwan dollar was boosted by big gains in the Korean won. A relatively smaller amount of share sales by foreign investors also helped sentiment on the local currency," said a dealer at a local bank.

"There were also some foreign banks selling the U.S. dollar," the dealer said.

The South Korean won <KRW=> posted its biggest one-day percentage gain with a 5.7 percent rise on Monday as concerted measures to solve the global financial crisis by governments and central banks around the world boosted Seoul shares. [ID:nSEO285806]

Taiwan stocks <.TWII> fell 2.15 percent on Monday to a more than five-year closing low, but losses were capped by new rules that limit daily stock price declines to 3.5 percent.

Foreign institutions sold T$1.3 billion worth of local shares on Monday. They have been net sellers every day this month, unloading more than T$397 billion so far since June.

The Taiwan dollar's gain also got a boost from exporters' purchases of local dollars, said another dealer in Taipei.

Exporters prefer a weaker Taiwan dollar so they can exchange their U.S. dollar earnings to more of the local currency.

In the non-deliverable forwards market, six-month NDFs widened to -0.550/-0.500 from -0.380/-0.340 in the previous session, indicating the Taiwan dollar will likely firm more in six months.

Taiwan's central bank, which keeps the Taiwan dollar in a managed float, was buying and selling the Taiwan dollar to make sure it moved in a tight range, the second dealer said.

The Taiwan dollar has fallen about 8 percent on fund outflows since hitting a 10-1/2-year high in late March, when investors bet on improving cross-Strait relations under China-friendly President Ma Ying-jeou.

On the smaller Cosmos exchange <COSMOS1>, the Taiwan dollar closed up at T$32.350 to the U.S. dollar, from the previous close of T$32.440.

Recommend this article

Average (0 votes)
0 stars
Sign in to recommend this article »
Most Recommended Stories »

Related Articles: Business