US stocks weaken, Taiwan stocks fall below 44000 points
Investors worried about the outlook for artificial intelligence investment and awaited the US midterm elections, with major US stock indices mostly closing lower, including the Philadelphia Semiconductor Index plunging 3.37%. Taiwan stocks opened lower and trended lower today, with an intraday low of 43191.58 points, closing down 1612.60 points at 43307.54 points, falling below the 44000-point mark, the 7th largest drop in history. Amid bearish news, foreign investors again made large adjustments, continuing to sell 1073.06 hundred million NT dollars of Taiwan stocks today, marking 4 consecutive sells with cumulative withdrawals of over 3600 hundred million NT dollars, with selling pressure becoming the main source of the sharp market decline.
Foreign capital outflows push NT dollar through 32.8
The NT dollar against the US dollar opened today at 32.61, with the foreign exchange market relatively calm in early trading, consolidating around 32.700. As it approached the previous depreciation low, exporters were attracted to sell foreign exchange, supporting the exchange rate. However, around 11 o'clock, the decline in Taiwan stocks expanded sharply, dragging the NT dollar down further, with the rate falling sharply in the afternoon, breaking through 32.8, touching a low of 32.86, plunging more than 2.6 jiao, as market risk aversion clearly heated up and stocks and currency simultaneously faced huge selling pressure.
Central bank intervention closes at 32.76 on huge volume
Although exporters increased selling of foreign exchange above 32.8, it was still no match for the huge outflow pressure from foreign investors, with foreign exchange traders bluntly saying today was back to the script of frantic foreign capital outflows. With central bank intervention mid-session and at the close, the NT dollar finally closed at 32.76, still down 1.68 jiao, the closing price a more than 1-and-a-half-year low. Total turnover in the Taipei and Cosmos foreign exchange markets exploded to 52.755 hundred million US dollars in huge volume, the 4th largest volume in history, showing fierce trading between foreign capital outflows and exporter selling.
Effectiveness of exporter support remains to be seen
Although news came yesterday that the central bank had temporarily lifted the limit on exporters selling US dollars, effectively recruiting exporters to help stabilize the exchange rate, and large exporter selling orders涌poured into the foreign exchange market that afternoon to ease depreciation, today saw another surging wave of foreign capital outflows. Regarding recent market reports that the central bank relaxed the daily limit on the number of exporter US dollar sales, foreign exchange traders believe that if the NT dollar exchange rate repeatedly tests a specific level, exporters may consider the rate to be approaching an ideal level and increase selling, making US dollar selling pressure heavier near that level. However, when the NT dollar depreciates sharply, as the rate weakened rapidly today, exporters may instead choose to wait temporarily for a more favorable price before selling, so even with relaxed limits, it may still be difficult to resist depreciation pressure on the NT dollar.