twn dlr / 32.955/ 766/ -12.1

16:42 14May09 RTRS-Taiwan dlr at near 1-wk low on stocks, fund outflows
* Taiwan dollar retreats from 2009 high a day earlier
* Exporters' purchases help limit decline
* Foreign fund outflows persist as stock market dips

(Updates to close)
TAIPEI, May 14 (Reuters) - The Taiwan dollar weakened on Thursday as local stocks fell on weak U.S. retail data, but exporter purchases for the local currency helped temper the fall.
The Taiwan dollar closed at T$32.955 to the U.S. dollar, its weakest finish since May 8 and softening from its Wednesday close of T$32.890.
On Wednesday, the currency had reached a 2009 intraday high of T$32.767.
Volume on the main Taipei Forex Inc exchange was moderate at $766 million, compared with $1.12 billion a day earlier.
Taiwan stocks <.TWII> ended down 1.87 percent on Thursday as gloomy U.S. retail sales results reignited fears that the economic slowdown may not be over.
The central bank also sold Taiwan dollars actively early in the session, dealers said, as the bank prefered the currency weak to help the island's sluggish exports.
The Taiwan dollar has risen about 6 percent so far since its trough in early March, due to optimism about new trade and investment deals signed in April between the island and economic powerhouse China.
But the currency recouped some of its losses in late trading.
"Foreign investors sold a lot of Taiwan shares, but that didn't translate to a lot of fund outflows, so the currency was not falling as much as expected," said a dealer in Taipei. "Exporters also bought the Taiwan dollar around T$32.9."
Exporters usually prefer a weaker local currency so they can exchange their U.S. dollar earnings into more of the Taiwan dollar.
Foreign institutions sold a total of T$12.1 billion ($367 million) worth of Taiwan shares on Thursday, bringing the total amount of shares they sold so far this week to T$33.2 billion. [ID:nTP170358] On the smaller Cosmos exchange , the Taiwan dollar fell to T$32.945, compared to its Wednesday close of T$32.880. (Reporting by Rachel Lee and Gina Chang) ((gina.chang@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging:gina.chang.thomsonreuters.com@reuters.com)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: MARKETS TAIWAN CURRENCY/


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Thursday, 14 May 2009 16:42:13RTRS [nTP341161] {EN}ENDS