Taiwan dlr weakens on stocks, eyes Chen-Ma meeting
Reuters - Thursday, November 6
TAIPEI, Nov 6 - The Taiwan dollar <TWD=TP> weakened on Thursday, with sentiment in the island's market dampened by concerns that a weak U.S. economy would affect Taiwanese exports.
The market will also be watching closely as President Ma Ying-jeou meets Chen Yunlin, China's top Taiwan negotiator, at around 0300 GMT on Thursday.
The Taiwan dollar <TWD=TP> weakened to an intraday low of T$32.950 to the U.S. dollar minutes after the open, but pared losses to trade at T$32.867 by 0216 GMT, still weaker than Wednesday's close of T$32.830.
Volume on the main Taipei Forex Inc exchange was $246 million at 0215 GMT, lower than $309 million during the same period a day earlier.
"The Taiwan dollar was pressured by domestic stock losses and the weakening South Korean won, but its fall was limited as foreign banks sold a lot of U.S. dollars," said a dealer at a local bank.
Taiwan stocks <.TWII> had fallen to 5.1 percent at 0200 GMT on Thursday, led by losses in financial shares.
The Taiwan dollar also tracked losses in the South Korean won <KRW=>, which lost 4 percent against the dollar early on Thursday on renewed worries the country's export-driven economy would be hit especially hard by a global slowdown. [ID:nSEO350953]
Dealers said exporters and the central bank also helped the Taiwan dollar from falling too much, by selling dollars.
Exporters usually prefer a weaker Taiwan dollar so they can exchange their U.S. dollar earnings to more of the local currency.
The central bank, which keeps the Taiwan dollar in a managed float, also stepped in as it aimed to help the Taiwan dollar to trade in a narrow range.
In the non-deliverable forwards market, six-month NDFs were quoted at -0.410/-0.360 from -0.470/-0.420 in the previous session, showing the local currency will likely firm less than earlier expectations in six months.
On the smaller Cosmos exchange <COSMOS1>, the Taiwan dollar fell to T$32.870 to the U.S. dollar by 0200 GMT, from the previous close of T$32.818. (Reporting by Gina Chang and Yvette Chen; Editing By Keiron Henderson)
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