TWD 06 Nov

17:07 06Nov2008 RTRS-Taiwan dlr up on foreign banks, ignores protests

(Updates to close)
TAIPEI, Nov 6 (Reuters) - The Taiwan dollar reversed earlier course to rise on Thursday as foreign banks and exporters sold the U.S. dollar, with investors ignoring widespread protests during a visit by China's top Taiwan negotiator.
The Taiwan dollar had weakened to an intraday low of T$32.950 to the U.S. dollar, but changed course later to finish at T$32.819, higher than Wednesday's close of T$32.830.
Volume on the main Taipei Forex Inc exchange was active at $1.284 billion, higher than $1.239 billion a day earlier.
The central bank bought and sold U.S. dollars during the day to smooth out swings in the Taiwan dollar.
"Foreign banks bought and sold the U.S. dollar," said a dealer at a local bank.
"However, one of the foreign banks has been selling a lot of U.S. dollars for the past few sessions on behalf of insurance companies that needed to raise capital in Taiwan," the dealer said.
Chinese official Chen Yunlin's visit to Taipei resulted in a flurry of agreements signed with his Taiwan counterpart to further boost trade ties, which is positive news for the market in the long term.
His trip to Taiwan marked one of the highest-level contacts between Taiwan and China since a Chinese civil war ended in 1949.
However, thousands of anti-China protesters took to the streets and fought with riot police as Chen met Taiwan President Ma Ying-jeou briefly on Thursday, though the impact on the market was muted.
The Taiwan dollar also ignored a sharp fall in the stock market, which dropped 5.71 percent on Thursday, with foreign investors selling a net T$6.9 billion ($210 million) worth of Taiwan stocks.
On the smaller Cosmos exchange , the Taiwan dollar rose to T$32.795 to the U.S. dollar, from the previous close of T$32.818.
(Reporting by Gina Chang and Yvette Chen; Editing By Keiron Henderson)
((chyenyee.lee@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging: chyenyee.lee.reuters.com@reuters.net))
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Thursday, 06 November 2008 17:07:53RTRS [nTP4545] {EN}ENDS