twn dlr 0320

16:48 20Mar09 RTRS-Taiwan dlr at 1-mth high on U.S. woes, c.bank curbs * Taiwan dlr gains on U.S. economy, strongest in early trade * Exporters, foreign banks buy local currency * Central bank buys U.S. dollars to curb the gains (Updates to close) TAIPEI, March 20 (Reuters) - The Taiwan dollar hit a more than one-month closing high on Friday as fears of a faltering U.S. economy pushed the dollar down globally, but the island's central bank capped gains by buying the U.S. currency. The Taiwan dollar closed at T$33.800 to the U.S. dollar, the strongest final price since Feb. 6 and up from Thursday close of $33.924. The currency also reached an intraday high of $33.630 in early trade, its highest since Feb. 9, but gave back early gains as Taiwan's central bank bought U.S. dollars, dealers said. "I think the central bank wants to stabilise the market," a dealer in Taipei said. "The currency went way up as soon as it opened, but everyone was saying 'hey, let's wait.'" Some investors, such as exporters, were waiting for the Taiwan dollar to come off the high so that they could exchange U.S. dollars into more of the local currency. The central bank, which keeps the Taiwan dollar in a managed float, seeks to help Taiwan exporters, which have been hammered by recession and prefer a weaker currency. The U.S. dollar, which headed for its biggest weekly fall in 24 years as investors feared the Federal Reserve's plans to buy longer-term government debt would cheapen the world's reserve currency, gave the local currency its key boost of the day. Later, the Taiwan currency gave up some gains after the South Korean won traded lower on importers' deals, dealers said. The won turned lower against the U.S. dollar on Friday as importers seized on a sharp fall in the U.S. currency as a chance to buy it for settlements. Losses in Taiwan stocks, down 1.48 percent on the day, also pressured the currency. Besides foreign banks and exporters selling U.S. dollars, there were also some oil-related companies that were buying U.S. dollars, limiting the Taiwan currency's gains, dealers said. Volume on the main Taipei Forex Inc exchange was $1.247 billion, down from $1.408 billion a day ago. The Taiwan dollar has gained more than 3.9 percent since hitting a 22-year intraday low in early March due to a recent surge of foreign fund inflows and exporters selling U.S. dollar earnings from some rush orders. However, the local currency is still 2.9 percent weaker since the beginning of this year due to worries about the general state of the global economy. On the smaller Cosmos exchange , the Taiwan dollar closed at T$33.765, stronger than its Thursday final price of T$33.930. (Reporting by Ralph Jennings and Roger Tung, Editing by Jacqueline Wong) ((ralph.jennings@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging: ralph.jennings.reuters.com@reuters.net)) Keywords: MARKETS TAIWAN CURRENCY/
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