U.S. dollar up sharply, tops NT$32.4 on fund outflows

Taipei, Aug. 3 (CNA) The U.S. dollar rose sharply against the Taiwan dollar Monday to climb past NT$32.4 due to large fund outflows, dealers said.

The greenback rose NT$0.146 against the Taiwan dollar to close at NT$32.438 after reaching an intraday high of NT$32.490. Combined turnover on the Taiwan Foreign Exchange and the Cosmos Foreign Exchange totaled US$3.92 billion.

Dealers said the U.S. dollar initially weakened against the Taiwan dollar as the U.S. dollar index, which tracks the U.S. dollar against the currencies of six major trading partners, declined.

However, after the greenback dipped to the day's low, the currency rebounded as foreign institutional investors moved large sums of money out of Taiwan, dealers said.

Although the Taiex, the Taiwan Stock Exchange's benchmark index, extended gains from the previous session, rising 266.66 points to close at 43,386.41 Monday, foreign institutional investors remained net sellers, recording net sales of NT$19.19 billion in shares.

Dealers said many Taiwanese exporters took advantage of the weaker Taiwan dollar to sell U.S. dollars, helping limit the local currency's losses.

They added that Taiwan's central bank stepped in the late trading session to smooth volatility in the Taiwan dollar.

While the United States and Japan confirmed their joint efforts to boost the Japanese yen by weakening the U.S. dollar, the Taiwan dollar still remained weak Monday, dealers said.

They said it is possible for foreign institutional investors to keep moving funds out of Taiwan, including cash dividend payments, so the U.S. dollar could challenge the NT$32.6 level in the short term.