TWD 13 Nov

16:44 13Nov2008 RTRS-Taiwan dlr hits 2-wk low on global recession concerns

(Updates to close)
TAIPEI, Nov 13 (Reuters) - The Taiwan dollar weakened to a two-week closing low on Thursday, as foreign banks bought the U.S. dollar and global recession concerns loomed, but exporters' purchases cushioned the currency's fall.
The Taiwan dollar, which fell for a third straight session, hit an intraday low of T$33.192 to the U.S. dollar just before the mid-day break, but pared some losses to end at T$33.177, its lowest finish since Oct. 29 and weaker than Wednesday's T$32.994.
Volume on the main Taipei Forex Inc exchange had been thin in previous sessions as the market lacked a clear direction, but rose to a moderate $1.030 billion on Thursday after jitters over the slowing world economy resurfaced.
"Foreign banks were selling the Taiwan dollar, but the Taiwan dollar was supported as exporters bought it around T$33.150-T$33.180," said a dealer at a local bank.
Exporters prefer a weaker Taiwan dollar so they can exchange their U.S. dollar earnings for more of the local currency.
Local stock losses and a falling Korean won added further pressure to the Taiwan dollar.
Taiwan stocks <.TWII> closed down 3.85 percent to a two-week closing low on Thursday, with foreign institutions unloading T$8 billion ($240 million) worth of local shares.
The South Korean won ended local trade down 2.3 percent against the U.S. dollar at a fresh two-week closing low on Thursday.
After the market closed, South Korea's finance minister said he expected plans for a currency swap deal with China to make progress on Friday. [ID:nSEO343633]
Since rallying to a 10-1/2-year high in late March, the Taiwan dollar has lost about 11 percent, mainly due to fund outflows as a bleak global economy will likely dampen the island's exports, a key driver of economic growth.
With the domestic economy slowing, dealers mostly expected the Taiwan dollar to continue on a downward trend to help support the island's export competitiveness.
On the smaller Cosmos exchange , the Taiwan dollar softened to T$33.180 to the U.S. dollar from the previous close of T$32.990.
(Reporting by Gina Chang and Yvette Chen; Editing by Ken Wills)
((chyenyee.lee@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging: chyenyee.lee.reuters.com@reuters.net)) Keywords: MARKETS TAIWAN CURRENCY/

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Thursday, 13 November 2008 16:44:58RTRS [nTP158724] {EN}ENDS