dlr 32.925 / 665 /

16:40 23Jun09 RTRS-Taiwan dollar hits 1-wk closing low, stocks weigh
* Local stock losses weigh, investors await Fed meeting
* Exporters buy Taiwan dollars at around T$32.950
* Taiwan dollar seen between T$32.80-T$33.00 in near term
(Updates to close)
TAIPEI, June 23 (Reuters) - The Taiwan dollar weakened on Tuesday to a one-week closing low, as local stocks tracked sharp losses on Wall Street on concerns over the health of the world economy, but exporters' purchases helped pare some losses.
The Taiwan dollar , which softened for a second straight session, recouped some early losses to end at T$32.925. That marked its weakest finish since June 15 and was lower than the previous close of T$32.898.
Volume on the main Taipei Forex Inc exchange was thin at $665 million, up slightly from $619 million a day earlier.
"Local stocks dropped a lot today, but the Taiwan dollar didn't weaken as much as expected, showing that there was strong support at around T$33.0," said a dealer at a local bank.
Taiwan stocks <.TWII> closed down 2.3 percent on Tuesday, their biggest daily percentage fall in a week, amid growing worries over the prospect of the world economy following sharp rises in the previous few months.
"The Taiwan dollar will probably trade between a narrow range before investors see a clear direction from the Fed's announcement on Wednesday," the dealer said, adding the local currency could trade between T$32.8 and T$33.0 in the near term.
The U.S. Federal Reserve will issue its policy statement on Wednesday, although it is widely believed the Fed will keep rates steady to support a nascent recovery.
However, the fall in the Taiwan dollar was limited as some exporters bought the local currency at around T$32.950. Exporters usually prefer a weaker Taiwan dollar so they can exchange their U.S. dollar earnings into more of the local currency.
On the non-deliverable forwards (NDF) market, six-month NDFs narrowed to -0.500/-0.450 from -0.545/-0.510 in the previous session, implying investors expect the local currency to firm by a smaller degree in half a year.
On the smaller Cosmos exchange , the Taiwan dollar softened to T$32.921 from Monday's close of T$32.880. (Reporting by Rachel Lee and Gina Chang, Editing by Jacqueline Wong) ((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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Tuesday, 23 June 2009 16:40:39RTRS [nTP91537] {EN}ENDS