TWD 0109

17:13 09Jan2009 RTRS-Taiwan dollar weakens on foreign fund outflows

(Adds closing values, details)
TAIPEI, Jan 9 (Reuters) - The Taiwan dollar weakened for a second straight session on Friday as foreign funds pulled their money out of a sliding stock market.
The Taiwan dollar rose to a high of T$33.069 in early trade, but later turned around to close the day at T$33.155, weaker than Thursday's close of T$33.115.
Taiwan's stock and foreign exchange markets will be open on Saturday this week as compensation for an extra holiday during the New Year weekend, but most dealers expect trading volumes to be low and said there could be some market volatility.
Volume on the main Taipei Forex Inc exchange was thin at $892 million, lower than Thursday's $1.337 billion.
"A lot of foreign funds were pulling their money out of the stock market and out of Taiwan, so there was some demand for U.S. dollars today," said a dealer in Taipei.
Foreign funds sold more than T$6 billion ($180 million) out of the local stock market on Friday, with a net outflow of more than T$3 billion so far this month.
Taiwan stocks <.TWII> closed the day lower at a two-week low on Friday.
Dealers said exporter deals that could support the Taiwan dollar also tapered off after morning trade, as volumes fell ahead of U.S. jobless data due after the Taiwan market's close.
"With so many people possibly going on leave tomorrow, volumes should be very low, and it's easier to manipulate the currency then," said another dealer in Taipei.
On the smaller Cosmos exchange , the Taiwan dollar weakened to T$33.140 from Thursday's T$33.115.
(Reporting by Kelvin Soh, 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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Friday, 09 January 2009 17:13:18RTRS [nTP97449] {EN}ENDS