Taiex Rallies to Reclaim 47000
Ahead of the U.S. Federal Reserve decision, with shrinking volume and a wait-and-see market, all 4 major U.S. stock indexes rose, and AI giant Anthropic filed for an initial public offering, reigniting investor enthusiasm for AI概念 stocks and also lifting the Taiex to open higher and move stronger today, with the weighted index hitting a high of 47060.46 points and closing up 939.35 points at 47035.58 points, reclaiming the 47000 mark. Foreign investors ended 2 straight days of selling and turned net buyers of 15.922 billion dollars today, leading some funds to flow back.
Taiwan Dollar Advances to 32.3 Level Intraday
The Taiwan dollar against the U.S. dollar opened at 32.44 today, and as the Taiex surged, it advanced to the 32.3 level intraday, touching a high of 32.398. However, amid two-way operations by foreign investors, the Taiwan dollar exchange rate briefly depreciated to an intraday low of 32.498. In the afternoon, as the Taiex closed higher, some foreign investors turned to inflows, and with exporter selling support, the Taiwan dollar turned higher again, closing up 3.4 cents at 32.418, a 2nd straight gain and an over-1-week high. Total turnover in the Taipei and E Ink foreign exchange markets was US$2.488 billion.
Market Cautious With Shrinking Volume Ahead of Fed Decision
Foreign exchange traders said the U.S. Federal Reserve will announce its latest interest rate decision early Thursday morning Taiwan time, with the market expected to leave rates unchanged. But with the Middle East war continuing, U.S. inflation pressure persisting, and AI financing doubts lingering, market confidence is fragile, and if the Fed sends a hawkish signal, financial markets could see renewed turmoil. Amid uncertainty, turnover in the Taiwan dollar market shrank notably today, reflecting investors turning cautious and waiting for the Fed meeting outcome before positioning.
Down Over 5.6 Jiao Since October, Weakest Asian Currency
Despite the Taiwan dollar exchange rate closing higher for 2 straight days, it has been hard to reverse the recent weakness. As market doubts over AI financing risks heated up, foreign investors have repeatedly sold the Taiex heavily and remitted funds out, causing frequent stock-and-currency double losses in Taiwan. Since October, the Taiwan dollar has cumulatively depreciated over 5.6 jiao, making it the weakest-performing Asian currency this year. On the strong Taiwan trade surplus this year yet relatively weak Taiwan dollar exchange rate, central bank Governor Yang Chin-long said at the Legislative Yuan today the main reason is that foreign investors have made handsome profits investing in Taiwan stocks this year, and when profits reach a certain level, they may choose to take profits based on investment strategy, asset allocation rebalancing and risk control considerations, and remit funds out. Yang reiterated the central bank has no specific defense line and will continue to uphold the willow tree theory and dynamic adjustment, letting the exchange rate sway but not too much, with the principle for intervention based on the strength of foreign investor inflows and outflows rather than price levels, intervening once the force is too strong and amounts are huge.