The New Taiwan dollar nudged lower yesterday on the back of weakness in the stock market and a softer yen yesterday. The unit closed at 35.006, compared with Friday's close of 34.975.
"The sharp drop in the stock market further shook investors' confidence and brought some retail buying" of greenbacks, a dealer at a foreign bank said.
Another dealer said some outflow of foreign stock investment funds was seen in early trade, but another wave of fund inflows helped the NT dollar come off from lows.
"Inflows of foreign stock funds complimented central bank's greenback sales, which was seen above 35.050. Therefore, the central bank didn't have to spend too much effort in defending the local unit," the dealer said.
Dealers believe that, despite weaknesses in the stock market, the NT dollar should be able to stabilize around 35.000 in the near-term. More volatility may be seen down the road in August when the government announces new quarterly GDP figures.
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