Surge in Taiwan Stocks Drives Equities and Currency Higher
Boosted by strong technology stock performance, U.S. stocks closed broadly higher, and Taiwan equities on October 28, led by electronic heavyweights, surged 939.35 points to successfully retake the 47,000 mark. The three major institutional investors posted combined net buys of NT$29.895 billion, including NT$15.922 billion in buying by foreign investors and NT$11.807 billion by investment trusts. Amid returning buying, the Taiwan dollar against the U.S. dollar closed at 32.418, up 3.4 cents, rising for a second consecutive day to a new high since October 19 and a one-week high, showing a joint equities-currency rally.
Morning Volatility, Afternoon Foreign Inflows Lift Currency
The Taiwan dollar rose to 32.398 in early trading, briefly touching the 32.3 level. As importers bought foreign exchange on strength while exporters also had selling demand, with importers and exporters pulling in opposite directions, the exchange rate moved in a range and once fell back toward the 32.5 level. Foreign exchange dealers said foreign investors traded in both directions in the morning session, with funds turning to net inflows in the afternoon, becoming the biggest driver of the exchange rate, which consolidated around 32.42. The central bank rarely stood aside that day, adopting the willow-tree theory and allowing the exchange rate to swing moderately.
Market Awaits FOMC Decision, Trading Light
The market awaited the Federal Open Market Committee decision, with widespread expectations that the U.S. Federal Reserve would hold interest rate policy steady, leaving trading slightly light with total turnover of US$2.488 billion. Foreign exchange dealers analyzed that foreign investors had made a clear turn, with both equities and the currency rising, but with the market on hold ahead of the rate decision, reflected in shrinking trading volume in both equities and foreign exchange. With month-end approaching and exporter selling demand, vendors sold around the 32.5 level, allowing the Taiwan dollar to temporarily leave its recent lows and consolidate near 32.3 to 32.5 in the short term.
Dollar Back Above 102, Asian Currencies Mixed
Internationally, Iran reportedly considered a new draft agreement proposed by Qatar, and international crude oil prices slipped. Meanwhile, details of Anthropic's upcoming initial public offering sparked heated market discussion, easing investor concerns and driving a rebound in AI concept stocks, with U.S. stocks turning broadly higher, while the dollar index bounced and returned above the 102 level. According to central bank statistics, the dollar index rose 0.24% and the euro fell 0.34%. Asian currencies were mixed, with the Taiwan dollar up 0.10%, the yen and the renminbi up 0.05% and 0.01% respectively, the Korean won plunging 0.89%, and the Singapore dollar down 0.04%.