TWD 31 oct

17:05 31Oct2008 RTRS-Taiwan dollar down on worries over econ outlook

(Adds details, quotes)
TAIPEI, Oct 31 (Reuters) - The Taiwan dollar reversed earlier gains to trade sharply lower on Friday due to uncertainty over the global economic outlook, which pushed Asian shares lower.
The Taiwan dollar ended at the day's low of T$33.000 to the U.S. dollar, 0.6 percent lower than the previous close of T$32.799, which was 1.5 percent higher on the day, marking the biggest percentage gain since Oct. 6, 1998.
Volume on the main Taipei Forex Inc was active at $1.137 billion, lower than $3.329 billion a day earlier, which was the second highest turnover on record.
"Even though Taiwan's stocks rose sharply, regional markets were down, so people unwound their positions as they were worried about the global economy," said a dealer in Taipei.
Even though Taiwan's main TAIEX index <.TWII> rose 4 percent on Friday, partly helped by a surprise interest rate cut on Thursday, other markets in the region, such as Japan and Hong Kong, fell.
The central bank's surprise cut in the main policy rate to 3.0 percent from 3.25 percent was aimed at boosting economic growth given the bleak global outlook.
During Friday's session, foreign institutions bought and sold U.S. dollars as investors squared their positions due to market uncertainty.
"Some people are waiting for a clearer direction in the U.S. dollar after the U.S. presidential election," said another dealer in Taipei.
The United States will hold the election on Nov. 4.
Some foreign institutions conducted inflows in the stock market as they bought a net T$1.421 billion ($43 million), the first net purchase since mid-October.
Friday's loss meant that the local currency had already lost 10 percent since hitting a 10-1/2-year high as the global financial crisis spooked the island's markets.
On the smaller Cosmos exchange , the Taiwan dollar fell to T$32.983 to the U.S. dollar from the previous close of T$32.720.
(Reporting by Lee Chyen Yee and Lin Miao-jung; Editing by Anne Marie Roantree)
((chyenyee.lee@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging: chyenyee.lee.reuters.com@reuters.net)) Keywords: MARKETS TAIWAN CURRENCY/

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Friday, 31 October 2008 17:05:44RTRS [nTP289887] {EN}ENDS