twn dlr / 33.889/ 1370 / -4.56

16:56 11May09 RTRS-Taiwan dollar at 2009 closing high on fund inflows * Fund inflows fuel Taiwan dollar climb, c.bank caps gains * Dealers expect Taiwan dollar to test T$32.5 this week (Updates closing values) TAIPEI, May 11 (Reuters) - The Taiwan dollar ended at its strongest close in 2009 on Monday, rising on fund inflows and denting safe-haven demand for the greenback, but its climb was kept in check by the central bank. The Taiwan dollar rose to an intraday high of T$33.821, but later pared some of those gains to close the session at T$32.889, stronger than Friday's close of T$33.040. Both the close and the intraday peak were the strongest since Dec 31 last year. Volume on the main Taipei Forex Inc exchange was active at $1.37 billion, higher than Friday's $1.032 billion. "Foreign fund bought quite a lot of Taiwan dollars in trade today," said a dealer in Taipei. "The central bank was on the other side, doing most of the buying of U.S. dollars, but volume was quite heavy and it couldn't keep up with the overall firming trend." Taiwan's central bank manages the Taiwan dollar in a controlled float and sometimes intervenes to taper fluctuations it feels are excessive. Investors also cheered U.S. data that showed that the 539,000 jobs lost in April were the fewest since October, fuelling expectations the world's largest economy has bottomed out and likely to benefit export-reliant emerging markets. [ID:nN07416806] Dealers said they expect the Taiwan dollar to test T$32.5 this week on hopes that the island's economy could depend on China's relatively resilient performance to ride out the downturn. The Taiwan dollar also took its cue from the offshore non-deliverable forwards (NDF) market. Six-month NDFs were trading for -0.720/-0.670, indicating the market expects the local currency to strengthen by about that amount in half a year. On the smaller Cosmos exchange , the Taiwan dollar closed at T$32.862, stronger than Friday's close of T$33.010. (Reporting by Kelvin Soh and Rachel Lee; Editing by Nick Macfie) ((kelvin.soh@thomsonreuters.com; +886 2 2508 0815; Reuters Messaging: kelvin.soh.reuters.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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