Fed Holds Steady, Market Focuses on December Move
As widely expected by the market, the U.S. Federal Reserve left interest rates unchanged, with a vote of 10 in favor and 2 opposed, shifting market attention to whether it will raise rates at the December meeting, with expectations that a 1-code hike in December remains possible. Amid the super central bank week, with U.S. rates unchanged, the dollar index fluctuated at a high level, holding at 102, down 0.26% on the day. U.S. stocks rose in response, with the four major indexes extending gains and the Philadelphia Semiconductor Index rising for a fourth straight day, but tech giants reported mixed earnings, investor concerns over debt-funded AI buildout remained, hot money shifted again, and Taiwan stocks on October 29 opened lower and moved lower.
Taiwan Stocks Fall 667 Points, Fall Below Quarterly Line
The Taiwan Weighted Index fell 667.25 points to close at 46368.33 points, falling below the quarterly moving average again. The three major institutional investors sold a combined NT$81.666 billion, with foreign investors turning from buyers to sellers, withdrawing NT$68.815 billion, while only investment trusts remained net buyers, buying for a 13th consecutive trading day. Banking sources analyzed that as Taiwan stocks have not stabilized above 47000 and foreign capital has not clearly returned, stocks and the currency suffered a double blow. The rebound lasted only one day before the stock-and-currency rebound quickly fizzled.
NT Dollar Approaches 32.6 Intraday, Central Bank Intervenes Late
The NT dollar against the U.S. dollar opened slightly higher, then fell back to the 32.4 and 32.5 levels as hot money continued to exit, breaking straight through two levels. In the afternoon, heavy foreign fund outflows pushed the currency down nearly 2 jiao, approaching the 32.6整数 mark, touching a low of 32.597, down nearly 1.8 jiao, just half a step away from 32.6. With the day being one of the last two trading days of October, exporters sold foreign exchange near 32.5, buying on dips, and the central bank entered the market before the close, lifting the close and recovering about 1 jiao of the decline, keeping the depreciation within 1 jiao. It closed at 32.492, down 7.4 cents, ending a two-day gaining streak, with a 0.23% decline the largest in a week, and total turnover of US$3.881 billion.
Weakest Asian Currency, May Retest 32.7 Level Next
Banking sources analyzed that despite the Fed holding steady and the dollar index fluctuating at highs, Asian currencies remained broadly soft even with some rebound. Major Asian currencies mostly rebounded on the day, with the Korean won surging 0.25%, the Singapore dollar and renminbi edging up 0.09% and 0.08% respectively, the yen dipping 0.03% ahead of the Bank of Japan decision, and the euro edging up 0.19% ahead of the European Central Bank announcement, while the NT dollar posted the largest decline at 0.23%, becoming the weakest Asian currency. Although the central bank sets no fixed defense line, it still intervenes when the intraday decline reaches around 2 jiao, and month-end foreign exchange selling by exporters helped narrow the decline. However, with the intraday rate already approaching 32.6, the next move may retest the recent low around the 32.7 level.