twd 0113

17:09 13Jan2009 RTRS-Taiwan dlr at 1-mth low on outflows; exporters buy

(Updates to close)
TAIPEI, Jan 13 (Reuters) - The Taiwan dollar weakened for a fifth session to a fresh one-month closing low on Tuesday due to foreign selling of local stocks and a globally strong U.S. dollar, but exporter purchases limited the local currency's fall.
The Taiwan dollar closed at T$33.265 to the U.S. dollar compared with Monday's final price of T$33.235 and was the lowest close since Dec. 12. The currency had reached a one-week intraday low of T$33.310 in early trade.
Volume on the main Taipei Forex Inc. was a light $806 million, but higher than $733 million a day earlier.
"Today the main factor moving the market is a foreign fund outflow for most of the session," said a dealer in Taipei.
Foreign investors sold T$523 million ($15.7 million) worth of Taiwan shares on Tuesday, which brought their net sales to T$13.471 billion so far this month. Taiwan stocks <.TWII> rose 1.8 percent on Tuesday, recovering from a two-week intra-day low.
Further pressuring the Taiwan dollar, the U.S. currency strengthened globally on Tuesday on mounting expectations that the European Central Bank would cut interest rates this week.
Exporters saw opportunities to sell off their U.S. dollars as the Taiwan dollar had been weakening for five straight sessions, meaning they could convert their foreign currency earnings to more of the local currency for cash needs at home.
Dealers said the central bank was doing two-way trades in the market, selling and buying U.S. dollars to smooth big fluctuations in the Taiwan dollar.
On the smaller Cosmos exchange , the Taiwan dollar closed at T$33.238 to the U.S. dollar from the previous final price of T$33.231.
(Reporting by Lee Chyen Yee, Ralph Jennings and Yvette Chen; Editing by Keiron Henderson)
((ralph.jennings@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging: ralph.jennings.reuters.com@reuters.net)) Keywords: MARKETS TAIWAN CURRENCY/

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Tuesday, 13 January 2009 17:09:03RTRS [nTP171211] {EN}ENDS