* Euro woes boost U.S. dollar, pressuring Asian currencies
* Dealers expect the Taiwan dollar to weaken further
* Central bank seen buying U.S. dollars
* Intervention seen as move to support exporters (Updates to close)
TAIPEI, March 30 (Reuters) - The Taiwan dollar fell on Monday the most in 1-½ months, as new concerns about the U.S. auto industry sparked a fresh wave of risk aversion and the island's central bank intervened to help push the currency lower.
The Obama administration rejected restructuring plans for
General Motors
The dollar and the yen rallied on the news, which dented risk appetite and prompted a mark down of emerging markets. Weakness in the euro was compounded by weekend news of Spain's first bank bailout of the crisis.
The Taiwan dollar
At 0.7 percent, Monday's fall was the steepest since Feb. 17, when the currency dropped by 1 percent.
Volume on the main Taipei Forex Inc exchange was thin at $817 million, lower than $881 million on Friday.
"The U.S. dollar is going strong everywhere because of the euro," a dealer in Taipei said. "All Asian currencies are under pressure."
Taiwan's currency is seen trading as low as T$34.200 later in the week.
Also pressuring the Taiwan currency, local stocks <.TWII> closed 3.43 percent lower on Monday, posting their worst single-day drop in 2-½ months, as investors fled risk and locked in strong gains in financial shares made over the past week.
Foreign funds sold T$2.241 billion ($70 million) in Taiwan stocks on Monday.
Taiwan's central bank also bought some U.S. dollars on Monday, further pressuring the local currency, to help the island's recession-strapped exporters, several dealers said.
Many of Taiwan's heavily export-reliant companies prefer a weaker Taiwan dollar as it allows them to boost their bottom line, which is reported in the local currency.
"The central bank was buying U.S. dollars and it bid at around the day's high today. I think what it's trying to do is, it wants to help exporters by ensuring the Taiwan dollar remains weak," said a dealer in Taipei.
Dealers expected the central bank to ensure that the Taiwan dollar weakens gradually as many of the island's companies begin tallying their books as the first quarter comes to an end.
In offshore offshore non-deliverable forwards (NDF), six-month NDFs were quoted at -0.150/-0.100 compared to Friday's -0.280/-0.230, meaning the market expected the local currency to firm by a smaller margin.
On the smaller Cosmos exchange
(Reporting by Ralph Jennings; Editing by Neil Fullick)