TWD 4 Nov

17:02 04Nov2008 RTRS-Taiwan dlr ends higher on fund inflows, exporters

(Updates to close)
TAIPEI, Nov 4 (Reuters) - The Taiwan dollar reversed course to end higher on Tuesday due to foreign fund inflows and purchases by exporters, with a visit by China's top Taiwan negotiator also helping to boost sentiment.
The Taiwan dollar had fallen to as low as T$32.982 to the U.S. dollar in early trade, but recouped losses to finish at T$32.869, slightly up from Monday's close of T$32.898.
Investors were cautious, with volume on the main Taipei Forex Inc exchange at a thin $808 million, sharply lower than $1.581 billion a day earlier.
"The pressure of U.S. dollar selling was heavy among foreign banks," said a dealer at a local bank.
"However, market sentiment was cautious because the trend of the U.S. dollar remained unclear," the dealer said.
Some investors said the market was awaiting the outcome of the U.S. presidential elections.
Taiwan stocks <.TWII> ended flat on Tuesday, although foreign institutions bought a small net T$64 million ($1.9 million) worth of Taiwan shares. However, foreign investors have sold more than T$462 billion so far since June.
The rise in the Taiwan dollar was also boosted by exporters.
"Exporters sold the U.S. dollar at around T$32.900," said the dealer.
Exporters prefer a weaker Taiwan dollar so they can exchange their U.S. dollar earnings to more of the local currency.
The visit by China's top Taiwan negotiator, Chen Yunlin, had little impact on the stock market, but overall sentiment was positive as China and Taiwan aimed to forge closer trade ties.
However, central bank intervention limited the Taiwan dollar's gain.
Dealers said the central bank, which prefers the Taiwan dollar in a tight range, was buying the U.S. dollar to prevent the Taiwan dollar from rising too much.
On the smaller Cosmos exchange , the Taiwan dollar rose to T$32.815 to the U.S. dollar, from the previous close of T$32.850.
(Reporting by Gina Chang and Jeanny Kao; 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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Tuesday, 04 November 2008 17:02:23RTRS [nTP330844] {EN}ENDS