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Early Taiwan dollar stable, range trade expected

TAIPEI: The Taiwan dollar TWD was holding steady in early Tuesday trade and dealers said the market was cautious in view of what they called the central bank's decisive recent intervention to blunt its appreciation.

The Taiwan dollar opened marginally lower at T$30.837 to the US dollar but soon rebounded to as high as T$30.816, after 30 minutes of trade, the Taiwan unit was at T$30.834, virtually unchanged from Monday's T$30.835 finish.

Turnover through dealers on the main market was heavy at US$89 million. Dealers said the Taiwan dollar was seen firming againt its US counterpart in the wake of persistent inflows of foreign equity funds.

Foreign funds were net buyers of T$4.188 billion in Taiwan stocks on Monday, bringing to T$29.772 billion (US$965 million) the cumulative total over seven straight sessions of net buying.

Dealers said the central bank remained the major force behind the Taiwan dollar's direction.

Dealers said the central bank's intervention to brake the Taiwan dollar's advances intended to encourage banks to cover their US dollar shorts.

On the smaller Cosmos market, the Taiwan dollar opened at T$30.82 compared to Monday's finish at T$30.826.

For Tuesday, dealers expected the Taiwan dollar to trade in a range of T$30.80-T$30.85.-Reuters