The New Taiwan dollar yesterday declined against its US counterpart, giving back the previous day's gain on a fall in local stock markets and outflows by foreign investors.
The local currency ended NT$0.279 lower to close at NT$31.853 against the greenback on the Taipei foreign exchange market. The NT dollar opened at NT$31.850 and fluctuated between NT$31.801 and NT$31.880 during the session.
The US dollar had gained sharply overnight against the yen and other currencies on stronger-than-expected US inflation data and remarks by French Finance Minister Thierry Breton suggesting the euro's recent gains were unwelcome. But analysts said they were unconvinced that the dollar had found its bottom, since global trade imbalances remain a major concern.
The market's focus now turns to the US Federal Reserve chairman's speech at the Chicago Fed's bank structure and competition conference, and the US Treasury Secretary's testimony to the Senate Banking Committee. Both events were scheduled for later yesterday.
In Taipei, the NT dollar weakened due to a 1.17 percent decline in stocks, after foreign institutional investors offloaded a net NT$19.84 billion (US$621 million) yesterday, according to the Taiwan Stock Exchange's statistics.
Traders said the NT dollar may extend its losses as a government report showed the economy slowed in the first quarter.
GDP rose 4.93 percent in the first quarter from last year after expanding 6.4 percent in the fourth quarter, the Directorate-General of Budget, Accounting and Statistics said yesterday.