twn dlr 0220

16:47 20Feb09 RTRS-Taiwan dlr near 6-yr low on econ fears, trade thin
(Updates closing values, adds details)
TAIPEI, Feb 20 (Reuters) - The Taiwan dollar extended losses on Friday to hit a near six-year low, weighed down by losses in local stocks and dragged down by a fall in South Korea's won, while local currency buyers waited for a better price.
The Taiwan dollar , which has been weakening over the past two weeks, hit a low of T$34.850 in afternoon trade but later pared some losses to close at T$34.808, compared to T$35.675 a day earlier. Friday's final price was the weakest since April 30, 2003.
Dealers also cautioned that the Taiwan dollar could weaken even further before receiving support at the key psychological T$35 level, where exporters would then step in to support the currency by buying it with U.S. dollars for cash needs at home.
"There's really a crisis of confidence right now," said a dealer in Taipei. "Couple that with all the other Asian currencies that are falling, and it's obvious the trend will carry on for a while more."
Volume on the main Taipei Forex Inc exchange was thin at $680 million, lower than Thursday's $730 million. Dealers said few investors were willing to enter the market without a real need.
"Exporters don't want to come in because they think it'll weaken further, importers don't want to trade because they feel the Taiwan dollar is too weak now, so volume has fallen by quite a lot," said another dealer in Taipei.
Dealers also said the central bank did not intervene much although it has been buying U.S. dollars actively over the past month or so to help the Taiwan dollar weaken.
The Taiwan dollar has lost nearly 6 percent of its value this year as the central bank seeks to increase the competitiveness of Taiwan's high-tech exports.
On the smaller Cosmos exchange , the Taiwan dollar was trading for T$34.800, compared to Thursday's close of T$34.663.
(Reporting by Kelvin Soh and Roger Tung; Editing by Ken Wills)
((kelvin.soh@thomsonreuters.com; +886 2 2508 0815; Reuters Messaging: kelvin.soh.reuters.com@reuters.com))
Keywords: MARKETS TAIWAN CURRENCY/


For Related News, Double Click on one of these codes:[M] [T] [Z] [MF] [RNP] [DNP] [PTD] [PMF] [TW] [ASIA] [FRX] [EMRG] [LEN] [RTRS] [TWD/] [TWD=TP]
For Relevant Price Information, Double Click on one of these codes:
Friday, 20 February 2009 16:47:41RTRS [nTP226640] {EN}ENDS