Taiwan dollar inches down vs stronger US currency

TAIPEI, July 4 - The Taiwan dollar weakened on Friday in thin trade as the U.S. currency rebounded globally, local stocks fell and many investors held back, waiting for fresh economic news.

The Taiwan currency <TWD=TP> closed at T$30.401 against the U.S. dollar, compared with the previous close of T$30.390.

Volume on the main Taipei Forex Inc exchange was a light $824 million, compared to $1.256 billion a day earlier.

"There really were no big factors today," a dealer in Taipei said. "There wasn't much movement, and the trading range was narrow. We saw flows, but they were average."

The U.S. currency's global comeback pressured the Taiwan dollar early on Friday, dealers said.

The U.S. dollar edged up against the euro, extending sharp gains made the previous day after U.S. payroll data came in close to expectations and eased some fears about the health of the U.S. job market and economy.

Foreign institutions sold a net T$10.751 billion ($354 million) in Taiwan stocks on Friday and they have sold a total of T$35.056 billion for the month to date. As foreigners pull out, they may sell their Taiwan dollar proceeds, putting pressure on the currency.

Taiwan stocks <.TWII> fell 2.24 percent on Friday to a 19-month low led lower by financials.

Central bank Governor Perng Fai-nan said earlier in the week that the bank would use a range of monetary policy tools to combat inflation, underscoring its decision last week to raise its main policy rate to a seven-year high.

Since the beginning of the year, the Taiwan dollar has risen about 6.3 percent, buoyed by expectations that the economy will improve under the new administration of President Ma Ying-jeou who took office on May 20.

On the smaller Cosmos exchange <COSMOS1>, the Taiwan dollar closed at T$30.397 to the U.S. dollar, compared to its previous final price of T$30.387.

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