TWD 03 Dec

17:15 03Dec2008 RTRS-Taiwan dlr at near 3-yr low on foreign fund outflows

(Adds details, quotes)
TAIPEI, Dec 3 (Reuters) - The Taiwan dollar weakened to a near three-year closing low on Wednesday, due to a poor outlook for the island's export-reliant tech sector and foreign fund outflows.
The Taiwan dollar pared earlier gains to close at T$33.528, its lowest finish since Dec. 12, 2005, and weakening from Tuesday's close of T$33.489.
Volume on the Taipei Forex Inc. exchange was light at $705 million, lower than the $778 million a day before and significantly lower than the average billion dollar mark seen on most trading days.
"The Taiwan dollar caught on to some of Wall Street's momentum, but it just fell together with the Taiwan stock market when it became clear how the share market was going to do," a dealer in Taipei said.
Taiwan stocks <.TWII> fell 1.14 percent on Wednesday to a one-week closing low, dragged down by technology shares on poor outlooks for microchip firms such as ASE <2311.TW> and TSMC <2330.TW>.
Foreign institutions sold Taiwan stocks for a second straight session by unloading a net T$6.882 billion ($205 million) on Wednesday.
Downward pressure on regional currencies such as the South Korean won and Chinese yuan also hurt the Taiwan dollar, analysts said.
"There are already expectations of a weakening Taiwan dollar, so when regional currencies fall, that will drag us down as well," another dealer said.
The Taiwan dollar has lost about 12 percent since hitting a 10-1/2-year high in late March, as increasing economic woes linked to the global financial crisis weighed on it.
On the smaller Cosmos exchange , the Taiwan dollar fell to T$33.525 from the previous close of T$33.480.
(Reporting by Kelvin Soh and Yvette Chen, Editing by Jacqueline Wong)
((kelvin.soh@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging:kelvin.soh.reuters.com@reuters.net)) Keywords: MARKETS TAIWAN CURRENCY/

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Wednesday, 03 December 2008 17:15:48RTRS [nTP299970] {EN}ENDS