After a day off yesterday, the Taiwan stock market today was driven by impressive US tech stock financial reports, with TSMC surging 42 points. The weighted index closed strongly up 552.61 points, rising 2.73% and approaching 20,800 points.
Meanwhile, the New Taiwan dollar exchange rate experienced a rare sharp increase, appreciating more than 1.2 dollars intraday and reaching a new high since January 2024. Although the central bank subsequently intervened, it remains in the early 30s, with one US dollar exchangeable for 30.84 New Taiwan dollars before this article's deadline.
Driving Forces: Capital and International Momentum
The simultaneous strength of Taiwan's stock market and New Taiwan dollar is primarily driven by capital inflows. Large amounts of foreign hot money pouring into the Taiwan stock market not only pushed up stock prices but also directly elevated the exchange rate through increased foreign currency purchases.
The strong performance of the US stock market, especially the impressive financial reports of tech giants, has attracted funds to Taiwan as an important part of the global tech supply chain. On the other hand, recent US economic data has been below expectations, and the market's rising expectations of potential Federal Reserve rate cuts have weakened the US dollar's safe-haven appeal, leading to a relative dollar weakness.
We know that the rapid appreciation of the New Taiwan dollar will increase exchange rate pressure on export-oriented enterprises, potentially causing losses due to exchange rate fluctuations. Additionally, for Taiwan's cryptocurrency investors, exchanging stablecoins like USDT back to New Taiwan dollars has also been affected.
According to MAX Exchange data, the current USDT/TWD trading pair is reported at 31.31 dollars, which is 4.5% lower than its peak a week ago. Of course, this might be just a short-term fluctuation, and not everyone needs to convert back to New Taiwan dollars, but we remind you to consider carefully if you have large withdrawal needs recently.
