Taiwan dollar falls

The Taiwan dollar fell on Friday on strong US dollar demand from companies for overseas purchases and investments, although its losses were capped by foreign fund inflows and central bank selling of the US currency. The Taiwan dollar ended weaker at T$32.809 to the US dollar compared with the previous close of T$32.789. The local currency opened stronger at T$32.759.
Volume on the main Taipei Forex Inc exchange was US $810 million, up from US $724.5 million a day earlier. Some dealers said there was a huge spike in volume at the last minute as the central bank entered the market selling US dollars.
"Oil firms were out in the market four or five times today buying US dollars. We saw trade amounts totalling around US $100 million on that front," said a dealer in Taipei. "There were other importers too, and fund management firms doing the same."
Importers buy foreign currencies to fund their purchases abroad, while insurers and fund companies invest overseas because returns are usually higher than in Taiwan, where interest rates remain among the lowest in the world.
The yen eased to 123.13/15 to the US dollar from 122.52 in the previous Asian session, as the US currency drew support from a surprisingly strong reading in US service sector activity.