The U.S. dollar strengthens and foreign capital remittances slow down! The New Taiwan Dollar holds 2 reds in a row to hold the price of 32.8 yuan

Although U.S. inflation in October was higher than expected, coupled with Federal Reserve Board Governor Waller's hawkish remarks, pushing up the U.S. dollar, the Taiwan dollar exchange rate fell to 32.968 yuan against the U.S. dollar during the session today. However, as the Taiwan stock market continued to rebound, the strength of foreign remittances slowed down, and the central bank adjusted late in the day, it ended at 32.86 yuan, an appreciation of 0.5 cents. The exchange rate was red for the second consecutive day, and the total trading volume in the Taipei and Yuantai foreign exchange markets dropped to US$2.352 billion.

Ignoring the decline in U.S. stocks, Taiwan stocks rose 1,545.23 points today, led by TSMC, to close at 44,257.15 points. The three major legal entities collectively bought more than 20.256 billion yuan. Among them, the excess sales of foreign capital narrowed to 766 million yuan.

The strength of foreign capital's remittances in the foreign exchange market also slowed down, with the New Taiwan dollar hitting a low of 32.968 yuan and a maximum of 32.83 yuan, fluctuating by 1.38 cents, and the range of fluctuations also converged.

According to statistics from the central bank, as of 4 p.m., the U.S. dollar index surged 0.78%, the Japanese yen plummeted 0.54%, the Singapore dollar depreciated 0.4%, the Korean won also fell 0.04%, and the RMB fell slightly by 0.03%. Only the Taiwan dollar bucked the trend and appreciated by 0.02%.

Huiyin insiders pointed out that the continued rebound of Taiwanese stocks and the slowdown in foreign remittance outflows will help stop the depreciation of the New Taiwan dollar. However, the expected increase in interest rates by the Fed will push up the US dollar, which will affect the willingness of exporters to sell foreign exchange. The exchange rate has stayed at 32.8 yuan for three consecutive days, all due to the central bank's late adjustment. It will be observed in the future whether foreign capital can turn into overbuying and remit inward, and whether the stronger US dollar will make exporters continue to wait and see, which will affect the stability of the New Taiwan Dollar.

The United States yesterday announced that the October consumer price index (CPI) and core CPI increased by 0.4% and 0.3% respectively, both higher than market expectations. Waller said before the data was released that even if inflation improves in October, he still supports a 1-cent rate hike in December; if the monthly core CPI growth rate remains about 0.3% or higher, a 2-digit rate hike should be considered.

After the data was released, market concerns about the Fed speeding up interest rate hikes increased, driving U.S. bond yields to rise in tandem with the U.S. dollar. According to the CME Group's FedWatch tool, the chance of a 1-digit rate hike in December is about 90%, and the chance of a 2-digit rate hike is about 10%.