TW market 1204

17:18 04Dec2008 RTRS-Taiwan at 3-yr closing low on funds, exporters support

(Adds close, quotes)
TAIPEI, Dec 4 (Reuters) - The Taiwan dollar extended losses on Thursday to end at a three-year closing low, as foreign fund outflows pressured the local currency,
The Taiwan dollar weakened for a fourth straight session to close at T$33.550 to the U.S. dollar, the weakest finish since Dec. 12, 2005, and compared with the previous close of T$33.528.
"We saw some key foreign banks conducting outflows in the market. There were a few export-related deals too, so the Taiwan dollar had some support, but we see many exporters preferring to wait until the Taiwan dollar hits T$33.8," said a dealer.
Foreign institutions sold Taiwan stocks for a third straight day by unloading a net T$6.418 billion ($191 million), which pushed the main TAIEX index <.TWII> 1.21 percent lower and pressured the Taiwan dollar.
Volume on the Taipei Forex Inc exchange was thin at $694 million, lower than the $705 million a day before.
"Many people are already on holiday by now and so trading volumes were quite low. There was some U.S. dollar buying in the NDF market," said another dealer in Taipei.
On the non-deliverable forwards (NDFs) market, six-month NDFs were quoted at -0.010/0.050, compared with -0.080/-0.030 on Wednesday, meaning that investors expect the Taiwan dollar to be weaker than previous expectations.
On the smaller Cosmos exchange , the Taiwan dollar weakened to T$33.553 from the previous close of T$33.525.
(Reporting by Yvette Chen and Lee Chyen Yee; 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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Thursday, 04 December 2008 17:18:41RTRS [nTP314142] {EN}ENDS