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Taiwan dollar up on exporter deals in thin trade
Reuters - Friday, November 28
TAIPEI, Nov 28 - The Taiwan dollar strengthened in thin trade on Friday, as exporters continued to buy the local currency, but the rise was cramped by a fall in the stock market.
The Taiwan dollar <TWD=TP> strengthened to an intraday high of T$33.216 in early trade, but pared gains to T$33.280 at 0203 GMT, higher than the previous day's close of T$33.302.
Volume on the main Taipei Forex Inc exchange was thin at $135 million after an hour of trade, lower than $221 million at the same time a day earlier.
"It's all very quiet today," a dealer in Taipei said. "All we saw this morning was a few exporters coming in to buy Taiwan dollars. Not much else and no sign of the central bank yet."
Taiwan exporters buy the local currency at favourable rates to meet cash needs at home.
Taiwan's central bank, which keeps the Taiwan dollar in a managed float, sometimes buys and sells U.S. dollars to prevent big swings in the local currency.
Taiwan stocks <.TWII> declined slightly in early trade, losing 0.15 percent, as a partial lifting of a short selling ban pressured the market.
A holiday in the United States also contributed to the lower volume, as investors unable to see any direction from Wall Street stayed on the sidelines.
Dealers said they did not expect the currency's recent upswing to last much longer.
"The larger economic figures don't look too good, so while we could see the Taiwan dollar strengthening by a little today, it should weaken in the long run," said another dealer.
In the non-deliverable forwards market, six-month NDFs widened to -0.220/-0.170 from -0.210/0.150 in the previous session, indicating the Taiwan dollar will likely firm by a larger degree in half a year.
On the smaller Cosmos exchange <COSMOS1>, the Taiwan dollar weakened slightly to T$33.310 to the U.S. dollar at 0141 GMT, from the previous close of T$33.295.
(Reporting by Kelvin Soh and Lin Miao-jung; Editing by Jonathan Hopfner)
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