Taipei, Aug. 8 (CNA) The U.S. dollar rose against the Taiwan dollar Wednesday, gaining NT$0.032 to close at NT$29.987 as foreign institutional investors repatriated their funds out of the island during the stock bonus issuing period, dealers said.
A weaker euro also gave a strong hint to traders to dump the local currency in exchange for the U.S. dollar amid fresh concerns over the debt problems in the eurozone, they said.
The greenback opened at NT$29.970, and moved between NT$29.830 and NT$29.989 before the close. Turnover totaled US$708 million during the trading session.
Large local high-tech stocks, such as IC packaging and testing service provider Siliconware Precision Industries Co. and power supplier system maker Delta Electronics Inc., issued their stock dividends this week, prompting foreign investors to move funds out of Taiwan, dealers said.
Entrusted by foreign institutional investors, foreign banks served as major buyers of the U.S. dollar in the local foreign exchange market to boost the value of the greenback against the Taiwan dollar, they said.
In addition, the weakness of the euro led traders here to cut their holdings in the Taiwan dollar amid fears that Germany will report weaker industrial production data, dealers said.
There have been rising concerns that Germany, the largest economy in Europe, has been affected by the ongoing debt crisis in the region, while fears of the global economic deterioration are on the rise, they said.
Amid caution toward the European financial situation, traders rushed to move their funds to the U.S. dollar as a safe haven soon after the local foreign exchange market opened, they added.
Turnover remained moderate in reflection of cautious sentiment ahead of a policymaking meeting scheduled by Bank of Korea, the central bank of South Korea, for later this week, while many traders have anticipated the bank will further ease liquidity to boost the economy, dealers said.
(By Kao Chao-fen and Frances Huang)