Taiwan's currency is dropping fast as traders bet the US Fed may raise interest rates again — bad for the Taiwan dollar and for local stocks, good for the US dollar.

• Hot US inflation data pushed up bets on a Fed rate hike, lifting the dollar and US bond yields.
• Foreign investors dumped more than NT$80 billion of Taiwanese stocks in one day last week, and that money is still flowing out.
• The Taiwan dollar broke past 31.7 per US dollar and is close to testing 31.8, a one-week low.
• Japan's central bank is widely expected to raise rates this week, but the yen barely moved because traders already priced it in.
• Other Asian currencies are weak too, with the Korean won sliding as its stock market falls and foreign money leaves.

Outlook: More pressure on the Taiwan dollar this week, with 31.8 the next level to watch as central bank decisions land.