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Monday May 5, 4:58 PM
Taiwan dollar falls on stocks, US currency reboundTAIPEI, May 5 (Reuters) - The Taiwan dollar fell to its lowest level in almost a month on Monday on foreign fund outflows and as the U.S. currency held on to most of last week's gains due to prospects of interest rate stability in the world's largest economy. The Taiwan dollar closed at T$30.498 against the U.S. currency, weakening from Friday's close of T$30.455. It reached T$30.582 on April 9.
"It looks like foreign funds are flowing out of Taiwan on account of the stock market," a dealer in Taipei said. "And you could say that the U.S. dollar also added pressure." Foreign institutions sold a net T$14.8 billion ($484 million) in Taiwan stocks on Monday as the local market closed down 1.41 percent because of drops in technology shares. The U.S. dollar was a shade softer on Monday but held on to most of last week's gains, supported by speculation that the Federal Reserve will not need to cut interest rates again. Oil dealers also pressured the local currency by buying U.S. dollars for purchases overseas, but exporters offset the loss by taking advantage of a favourable rate to buy the local currency, another dealer in Taipei said. The dealer expected the Taiwan dollar to trade between T$30.450-T$30.500 in the short term. Since the beginning of the year, the Taiwan dollar has risen about 6 percent because investors bought the local currency on prospects for economic improvements under a new administration. Ma Ying-jeou will take office as president on May 20. On the smaller Cosmos exchange , the Taiwan dollar closed at T$30.499 to the U.S. dollar, compared with Friday's close of T$30.460. (Reporting by Ralph Jennings and Yvette Chen)
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