The New Taiwan dollar broke NT$33.0 against the US dollar on the Taipei foreign exchange market yesterday, closing up NT$0.101, or 0.3 percent, at a 14-month high of NT$32.999.
The local currency opened at NT$33.100 against the greenback and traded as high as NT$32.876, until the central bank came in to stop the selling of the US currency, a bank manager said.
"As the outlook for the US currency still doesn't look good, exporters and individual depositors will continue to sell the currency," said Liu Chih-kang (劉志剛), a manager with the Shanghai Commercial & Savings Bank (上海商銀).
"Normally the selling of US dollars ranges between US$700 million and US$800 million a day, but those figures have exceeded US$1 billion recently," Liu said. According to the Taipei foreign exchange market, the total value of trade yesterday reached US$1.245 billion, compared with the previous day's US$1.55 billion.
So far this year, the NT dollar has gained nearly 5.8 percent against the US dollar, compared with the yen's 13.4-percent advance, the South Korean won's 12.1-percent rise and the Singapore dollar's 6.4-percent gain.
A dealer at a local bank said the local currency will probably appreciate to NT$32.8 against the greenback later this week and to NT$32.5 in the near term.
"Since the unit has broken the NT$33.0 level, it could prompt a kind of `psychological reaction' in the market leading to more dumping of the US dollar," said the dealer, who asked not to be named.
But Liu said it's hard to forecast where the unit is headed, as traders remain unclear on the central bank's policy stance. Most pundits agreed that the NT dollar still has room to advance.
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