Taiwan dollar firms on foreign fund inflows

* Foreign fund inflows, rising stocks boost Taiwan dollar

* Investors unload U.S. dollars after going long recently

* Taiwan dollar to see resistance at T$32.700

TAIPEI, June 10 - The Taiwan dollar strengthened on Wednesday due to foreign fund flows into the stock market, with investors monitoring more U.S. data to gauge in which direction the U.S. dollar was headed.

The Taiwan dollar <TWD=TP> had risen to T$32.752 to the U.S. dollar by 0216 GMT from the previous close of T$32.853.

Volume on the main Taipei Forex Inc exchange rose to $279 million after 75 minutes of trade, from $207 million during the same period on Tuesday.

Taiwan stocks <.TWII> were up 0.8 percent, with dealers saying some foreign funds were already entering the island's markets, supporting the Taiwan dollar.

"We see some foreign funds coming in, but whether that continues for the rest of the day remains to be seen," said a dealer in Taipei.

"Interbank and foreign dealers have been going long in the U.S. dollar over the past week or so and some are adjusting these positions today," the dealer said.

Dealers are watching to see whether stock gains would translate into fund buying after foreign institutions sold Taiwan shares for five straight sessions through Tuesday.

The central bank was little seen in the forex market, although some dealers were wary of moves by the authority, which prefers the Taiwan dollar to stay relatively weak to help exporters during the global downturn.

Dealers forecast the Taiwan dollar to meet resistance at T$32.70, despite its strengthening trend in early trade.

On the smaller Cosmos <COSMOS1> exchange, the Taiwan dollar firmed to T$32.750 to the U.S. dollar from the previous close of T$32.820.