Federal Reserve Stands Pat, Taiex Still Plunges 667 Points
The U.S. Federal Reserve held rates steady as expected, and the four major U.S. stock indexes closed higher, but earnings from tech giants were mixed and concerns over AI investment returns lingered. The Taiex plunged nearly 700 points on the 29th, closing down 667 points, mainly as foreign investors turned sellers again and dumped NT$68.815 billion. Amid massive fund outflows, forex market turnover surged, with total trading volume reaching US$3.881 billion, while the New Taiwan dollar stayed weak intraday, ending a two-day gaining streak.
New Taiwan Dollar Approaches 32.6 Intraday, Central Bank Intervenes Late in Session
The New Taiwan dollar against the U.S. dollar was also under pressure, turning lower quickly after a slightly higher open, with losses widening further after midday to approach the 32.6 level, hitting an intraday low of 32.595. The central bank intervened again late in the session, containing the depreciation to within NT$0.1, and it closed at 32.492, down 7.4 cents, barely holding above 32.4, with a daily decline of 0.23% marking the largest in over a week. In the short term the New Taiwan dollar remains range-bound, hovering around the 32.5 level, with a possible retest of the prior low of 32.7.
Strong Dollar, No Foreign Inflow Turnaround Keeps Downward Pressure
Bank forex managers analyzed that although the Federal Reserve stood pat, markets still expect a 1-percentage-point rate hike in December, so the dollar index showed little reaction after the meeting and remains firm at highs, leaving the New Taiwan dollar temporarily range-bound. Overall, Taiwan stocks remain the main reference, with funding flows the biggest factor; with the U.S. dollar still偏strong short-term and Taiwan stocks volatile, without a clear turn to inflows by foreign investors, it will be hard for the New Taiwan dollar to reverse its weak bias. The New Taiwan dollar has recently tracked Taiwan stocks closely, rising with foreign inflows after the holiday but turning lower again on the 29th.
Central Bank Says No Fixed Line, Super Central Bank Week Focuses on Yen
Bank forex managers pointed out that even though the central bank stresses it sets no defense line for the New Taiwan dollar, with the intraday decline approaching NT$0.2, the central bank stepped up intervention, also boosting full-day trading volume; meanwhile exporters and some U.S. dollar holders took profits intraday, slightly slowing the pace of depreciation. This week is a global super central bank week; although the U.S. paused rate hikes, markets read Warsh's remarks as hawkish, the U.S. dollar remains relatively strong, and non-U.S. currencies have no chance to rebound for now; while the European Central Bank will announce its rate decision later, and the Bank of Japan follows on the 30th, with markets mostly expecting the Bank of Japan to hold rates steady, focus is on whether Governor Kazuo Ueda signals further rate hikes, with yen moves likewise affecting expectations for Asian currencies.