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17:05 12May09 RTRS-Taiwan dollar off 2009 high as stocks fall * Taiwan dollar falls on stocks, U.S. dollar short cover * Light central bank intervention seen * Dealers say central bank still prefers gradual depreciation (Updates closing values) TAIPEI, May 12 (Reuters) - The Taiwan dollar pulled back on Tuesday from its 2009 closing high hit in the previous session, as a fall in the stock market and investors covering their short position on the greenback pressured the local currency. The Taiwan dollar fell to an intraday low of T$33.018, but later pared some of those losses to close the session at T$32.893, snapping a three-session winning streak. The Taiwan dollar ended slightly weaker than Monday's close of T$32.889. Volume on the main Taipei Forex Inc exchange was moderate at $1.04 billion, lower than Monday's $1.37 billion. "A fall in the stock market led to some small outflows, but much of it was due to some investors looking to cut their exposure and covering their short positions on the U.S. dollar," said a dealer in Taipei. "The central bank wasn't particularly active either, and although it was buying some U.S. dollars, its behaviour suggests it's comfortable with the current level," the dealer added. Taiwan stocks <.TWII> closed more than 3 percent lower on Tuesday, pressuring the local currency as some investors took profits and sold off their Taiwan dollar holdings. While the Taiwan dollar has been trending higher in the past two weeks, dealers said they did not believe the central bank would change its policy of preferring a weaker local currency. "Export figures still aren't outstanding, so there's no reason to see why the Taiwan dollar should strengthen too drastically," said another dealer. "Anyway, climbs and falls don't go in a straight line." On the smaller Cosmos exchange , the Taiwan dollar closed at T$32.880, weaker than Monday's close of T$32.862. (Reporting by Kelvin Soh and Argin Chang, Editing by Jacqueline Wong) ((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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