twd 0206

17:13 06Feb2009 RTRS-Taiwan dollar down for second straight day on c.bank

(Updates closing values, adds details)
TAIPEI, Feb 6 (Reuters) - The Taiwan dollar reversed early gains on Friday to close weaker for a second straight day as the central bank's purchase of U.S. dollars reversed foreign fund inflows that had kept the local currency in positive territory.
The Taiwan dollar closed at T$33.750, reversing course in the final minutes of trade after having hit a high of T$33.631 in early trade. The local currency closed at T$33.705 on Thursday.
Volume on the main Taipei Forex Inc exchange was thin at $744 million, but higher than Thursday's $588 million.
"If you ignore the final 30 minutes of trade where there was clearly some intervention by the central bank, we saw lots of foreign investors snapping up Taiwan dollars for most of the day," said a dealer in Taipei.
Foreign investors bought a total of T$6.45 billion ($191 million) worth of Taiwan stocks on Friday, bringing their total net purchase this month to T$4.34 billion.
Taiwan stocks <.TWII> rose more than 2 percent on Friday, their highest finish in three weeks, increasing investor risk appetites and leading to an outflow from safe havens such as the U.S. dollar.
However, some dealers cautioned that the Taiwan dollar could weaken rapidly in the coming week, especially if the island's export data, due on Monday, is below expectations.
"We're not too far off from the T$34 level, so I do think that's where the Taiwan dollar will find support if exports fall more than expected," said another dealer.
Taiwan's exports in January likely fell 48 percent from a year earlier, posting a second consecutive record decline, a Reuters poll showed. [ID:nTP350483]
On the smaller Cosmos exchange , the Taiwan dollar closed at T$33.710, compared to Thursday's close of T$33.655.
(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.com)) Keywords: MARKETS TAIWAN CURRENCY/

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Friday, 06 February 2009 17:13:33RTRS [nTP114287] {EN}ENDS