tw dlr 0407

17:09 07Apr09 RTRS-Taiwan dlr falls on risk concerns, c.bank movement * Foreign fund outflows as U.S. dollar looks safer * Central bank buys U.S. dollars, calls dealers * Dealers see more room for Taiwan currency to strengthen (Updates to close) TAIPEI, April 7 (Reuters) - The Taiwan dollar pulled back sharply on Tuesday from a three-month closing high in the previous session, as the U.S. currency benefited from new global concerns about riskier assets, sparking foreign fund outflows. Taiwan's central bank also pushed the local currency lower with heavy U.S. dollar purchases, especially in early trade, dealers in Taipei said. The Taiwan dollar closed down at T$33.569 to the U.S. dollar after falling by as much as T$0.450, or 1.4 percent, in early trade. That compared with Monday's close of T$33.250, which had been the highest close since Jan. 12. The U.S. dollar rose globally on Tuesday as renewed nervousness about the health of banks stalled a rally in riskier assets and investors took defensive positions, pocketing profits from a recent run in higher yielding currencies. Foreign funds in Taiwan bought U.S. dollars in light of the global trend and expectations of dismal Taiwan export data, dealers said. "Foreign funds withdrew U.S. dollars for their clients, so there was a clear outflow," said a dealer in Taipei. Data released after the Taipei markets closed showed that Taiwan's exports in March tumbled 35.7 percent from a year earlier on steep falls in electronic goods to major markets such as the United States and China. [ID:nSP397103] Volume on the main Taipei Forex Inc. was relatively light at $937 million, down from $1.837 billion a day ago. Taiwan's central bank, which keeps the currency in a managed float and has sought recently to help the island's recession-strapped exporters, actively bought U.S. dollars on Tuesday, dealers said. Two dealers said they had received calls from the central bank asking them to cover short positions in U.S. dollars in the Taiwan dollar market. [ID:nTP189305] "They want us to behave and reduce our short positions in the U.S. dollar," said a dealer at a major foreign bank. The Taiwan dollar still has room to strengthen despite Tuesday's fall, dealers said, citing offshore non-deliverable forwards. Six-month NDFs were quoted on Tuesday at -0.410/-0.360, indicating that the market expects the Taiwan dollar to strengthen in half a year. On the smaller Cosmos exchange , the Taiwan dollar closed at T$33.550 to the U.S. dollar, compared to Monday's final price of T$33.115. (Reporting by Ralph Jennings and Yvette Chen, Editing by Jacqueline Wong) ((ralph.jennings@thomsonreuters.com; +886 2 2500 4882; Reuters Messaging: ralph.jennings.reuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to newsfeedback.asia@thomsonreuters.com)) Keywords: MARKETS TAIWAN CURRENCY/
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