New Taiwan dollar hits NT$28.978, closes down

At the end of the session, the New Taiwan dollar closed at NT$29.091 against the greenback, weakening NT$0.001 from the previous session, on turnover of US$786 million.

Yet in the morning, the local currency was on fire, opening at NT$29.1 and going through an upward trend that sent the local unit past NT$29 to NT$28.978, rising NT$0.112 from the previous session.

The rally had to do with foreign funds flowing into different parts of Asia, including Taiwan, on an increase of investors' risk appetite after a solution to the fiscal cliff crisis in the United States, where stocks surged in overnight trading.

The local unit's upswing matched that of other Asian currencies. By noon yesterday the Chinese yuan strengthened past 6.24 to approach 6.23. A rally was also seen in the Australian dollar, the New Zealand dollar, the Philippine peso and the euro.

The Hong Kong dollar and Korean won, on the other hand, dropped after a sharp rally during the previous session.

Later in the morning, Taiwan's central bank intervened, sending the local unit to NT$29.002 at noon and NT$29.091 at the session's finish.

According to dealers, the local unit's future movement will depend on the attitude of the central bank, which may ask foreign investors to transfer their funds parked in Taiwan to local stocks as a way to curb currency speculation and boost stock trade.

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