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Taiwan dlr at near 2-wk low on funds, importers
Reuters - Thursday, November 13
TAIPEI, Nov 12 - The Taiwan dollar <TWD=TP> ended at a near two-week low on Wednesday, as foreign banks and oil companies bought the U.S. dollar, but exporters' purchases of local dollars helped limit its fall.
The Taiwan dollar hit an intraday low of T$33.002 against the U.S. dollar during early trade, but pared some losses to end at T$32.994, its weakest finish since Oct. 31. It closed at T$32.874 in the previous session.
Investors were mostly sidelined as the market lacked direction, with volume on the main Taipei Forex Inc exchange at a light $873 million but higher than $586 million on Tuesday.
"Foreign banks bought U.S. dollars in the morning, and the weakening South Korean won and Singapore dollar also dragged the Taiwan dollar lower," said a dealer at a local bank.
Since both economies compete on exports, the Taiwan dollar tends to trade lower when the South Korean won <KRW=> weakens.
Oil companies, which usually need U.S. dollars for imports such as crude, purchased the U.S. currency and in turn pressured the Taiwan dollar, said another dealer in Taipei.
However, exporters helped cushion the Taiwan dollar's fall as they bought the local currency at around T$32.980, the second dealer said.
Exporters usually prefer a weaker Taiwan dollar so they can exchange their U.S. dollar earnings for more of the local dollar.
"Trading has been light recently as it's near the end of the year," said the dealer.
"It seems the central bank didn't enter today and let the market move because trade was light and not very volatile," he said, adding he expected the Taiwan dollar to trade between T$32.8-T$33.2 this week.
The Taiwan dollar has fallen about 10 percent since rallying to a 10-1/2-year high in late March, largely due to fund outflows.
On the smaller Cosmos exchange <COSMOS1>, the Taiwan dollar softened to T$32.990 to the U.S. dollar, from the previous close of T$32.863.
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