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17:17 04Aug09 RTRS-Taiwan dlr hit 2-mth high on fund inflows * Taiwan dollar highest since June 5 on foreign fund inflows * Importers, central bank cap Taiwan dollar gains * T$ seen trading between T$32.5 and T33.0 this week (Updates to close) TAIPEI, Aug 4 (Reuters) - The Taiwan dollar firmed to a two-month high on Tuesday, bolstered by foreign fund inflows into the equity market after an overnight rally on Wall Street boosted sentiment. "Foreign inflows and a weak U.S. dollar lent support to the local currency," said a dealer in Taipei. "But gains were offset by importers, who actively bought U.S dollars at around $32.60." The local currency extended three straight sessions of gains to close at T$32.674, the highest finish since reaching T$32.517 on June 5. The intraday high of T$32.674 is also the strongest since June 5. The Taiwan dollar also took a boost on the global U.S. dollar trend. The U.S. dollar was trading close to its lowest level this year against a basket of currencies <.DXY> on Tuesday after bullish global stocks and upbeat economic data from around the world lifted investor risk appetite. [ID:nT155625] Taiwan's central bank bought U.S. dollars to curb gains in the local currency as a way to help recession-hit exporters. Exporters usually prefer a weak Taiwan dollar so they can exchange U.S. dollar earnings into more of the local currency. The local currency also took cues from the offshore non-deliverable forwards (NDFs) market, which widened on Tuesday, indicating investors anticipated the Taiwan dollar to strengthen more than previously expected. Dealers said the Taiwan dollar would trade mainly between T$32.5 and T$33.0 this week. 0800 GMT MONDAY SESSION T$ (Taipei Forex Inc) 32.674 32.768 Volume in $ mln (Taipei Forex Inc) 734 656 T$ (Cosmos) 32.666 32.760 Six-month NDFs -0.590/-0.550 -0.520/-0.470 Note: Taipei Forex Inc is Taiwan's main forex exchange; Cosmos is a smaller exchange. Both markets close at 0800 GMT. Source: NDFs quotations from Prebon Asia For more foreign exchange news, please click (Reporting by Rachel Lee and Joan Hsu; Editing by Chris Lewis) ((gina.chang@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging: gina.chang.reuters.com@reuters.net)) ((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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