The New Taiwan dollar dropped below NT$31.5 against the U.S. dollar April 28 due to weak Asian currencies.
The local currency opened steady at NT$31.412 before gaining ground in early trade, thanks to capital influx from European investors. But fund flight by U.S. investors put a lid on the local bourse's rally in the afternoon session. Intervention by the Central Bank of the Republic of China in the last minutes further dragged the NT dollar down.
Divided moves by European and U.S. investors produced price volatility and active trade in domestic foreign exchange markets, currency market dealers said.
The euro and Asian currencies were weighed down by the strong showing in the U.S. dollar on the global front April 28.
With a ratings agency cutting Greek debt to junk level, the euro fell to below US$1.32.
In Asia, currencies, except for the Japanese yen, experienced a downturn, which advanced 0.57 percent against the U.S. dollar. Among other units in the region, the South Korean won gave up 0.77 percent against the greenback and the Singapore dollar lost 0.4 percent. The Malaysian ringgit tumbled 0.93 percent following surges of over 7 percent this year.
While early foreign capital inflow at one point boosted the NT dollar into the NT$31.36 neighborhood in intraday trading, regional currency slumps and the central bank's intervention led the local currency to close below NT$31.50.
These international factors convinced overseas investors to recover their short position in the U.S. dollar. The discount to one-month non-delivery forward contracts was narrowed to NT$0.07, currency trading dealers said. (HML-THN)