TWD 20 oct

16:37 20Oct2008 RTRS-Taiwan dollar eases on stocks, sales by oil traders

(Updates to close)
TAIPEI, Oct 20 (Reuters) - The Taiwan dollar eased on Monday due to local stock losses and U.S. currency purchases by oil traders, holding to its lowest level since October last year as investors waited for market-moving news.
The Taiwan dollar closed at T$32.580 to the U.S. dollar, compared to its Friday final price of T$32.550.
Volume on the main Taipei Forex Inc. was a thin $556 million, the lowest in three months, compared with $672 million on Friday.
"A lot of investors are just monitoring the market today," a dealer in Taipei said. "The drop in local stocks and some trading by oil firms, that was about it."
Taiwan stocks <.TWII> fell 0.58 percent to their lowest close in more than five years on Monday, as investors dumped tech heavyweights to play catch-up with other Asian markets that had seen more dramatic falls.
Foreign institutions, which would use local currency to buy the island's stocks, sold a net T$5 billion ($153 million) worth of shares on Monday and have been big sellers for the past several months, unloading more than T$422 billion since June.
Currency investors held back on the Taiwan dollar, awaiting news on U.S. stocks in light of the global financial crisis and looking at how much more foreign funds will pull out of Taiwan stocks, dealers said.
Taiwan oil trader purchases of U.S. dollars, which they need for business overseas, also pressured the local currency on Monday, the dealer said.
In the non-deliverable forwards market, six-month NDFs were quoted at -0.440/-0.390, wider than -0.360/-0.310 the previous session, implying investors saw the Taiwan dollar firming by a larger degree in six months.
Since hitting a 10-1/2-year high in late March, the Taiwan dollar has lost about 8 percent, mainly due to fund outflows.
On the smaller Cosmos exchange , the Taiwan dollar closed at T$32.580 to the U.S. dollar, compared to the previous session's final price of T$32.575.
(Reporting by Ralph Jennings and Lin Miao-jung; Editing by Ken Wills)
((ralph.jennings@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging: ralph.jennings.reuters.com@reuters.net))
Keywords: MARKETS TAIWAN CURRENCY/

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Monday, 20 October 2008 16:37:13RTRS [nTP273322] {EN}ENDS