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Taiwan dollar edges up as investors wait, watch

Reuters - Monday, October 13

TAIPEI, Oct 13 - The Taiwan dollar <TWD=TP> edged up in thin trading on Monday as investors waited to see how markets would perform locally and overseas following recent volatility amid the global financial crisis.

The Taiwan dollar stood at T$32.429 to the U.S. dollar at 0143 GMT, compared with its Thursday final price of T$32.437, after opening flat. Markets were closed on Friday for a public holiday.

Volume on the main Taipei Forex Inc exchange was light at $102 million after 45 minutes of trade.

"Everyone is watching to see what happens," a dealer in Taipei said. "But people aren't as pessimistic now as before."

Among the factors is Taiwan's stock market, <.TWII> which was down 2.99 percent in early trade on Monday, following a series of steep drops in line with global markets. But the losses were pared by new rules announced over the weekend that limit daily drops in stock prices to 3.5 percent.

Investors were also watching other Asian markets, some of which bounced back on Monday after policymakers around the world took increasingly bold steps to shore up hard-hit financial markets, and were monitoring global trends in the U.S. dollar, dealers said.

If the Taiwan dollar reaches 32.500, the market could see a surge of trade, dealers said. Exporters, which need the local currency for cash needs at home, could be particularly active.

The Taiwan dollar has fallen about 8 percent on fund outflows since hitting a 10-1/2-year high in late March, when improving cross-Strait relations under President Ma Ying-jeou were expected to help the island's economy.

On the smaller Cosmos exchange <COSMOS1>, the Taiwan dollar traded at T$32.430 to the U.S. dollar after 45 minutes of trade, from the previous close of T$32.440.

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