Taipei--The U.S. dollar rose against the Taiwan dollar Monday, gaining NT$0.002 to close at NT$30.419 after recouping earlier losses in the wake of foreign funds outflows, dealers said.
However, the Taiwan dollar got some support from foreign institutional buying in the local equity market, which prevented it from falling further, the dealers said.
The greenback opened at NT$30.330 and moved between NT$30.310 and NT$30.420 before the close. Turnover totaled US$596 million during the trading session.
Soon after the local foreign exchange market opened, the U.S. dollar fell against the Taiwan dollar, as the local currency was supported by the strength of other currencies in the region, the dealers said.
The South Korean won, which the Taiwan dollar tracks closely, and the Chinese yuan moved higher against the U.S. dollar, giving hints to currency traders here to dump the greenback but raise their Taiwan dollar holdings, they said.
In the local equity market, foreign institutional investors stood on the buy side, adding downward pressure on the U.S. dollar. According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$1.08 billion (US$35.50 million)-worth of shares on the main board, sending the weighted index up 0.13 percent by Monday's close.
However, the U.S. dollar regained its footing in the afternoon session as foreign investors who received cash dividends from their investments in local equities started to send the cash back to their home markets, the dealers said.
With more and more listed companies scheduled to issue cash dividends later in the week, foreign investors are expected to continue to remit money out of the country, which could put pressure on the Taiwan dollar, they said.
Contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) is one of the major listed companies to issue cash dividends later in the week. TSMC will give NT$181.5 billion in cash dividends for its 2016 earnings on Thursday, and foreign investors will take about 80 percent of the funds.
Source: Focus Taiwan News Channel
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