The pressure on hot money remittances is reduced, the Taiwan dollar has been red twice in a row, waiting for the Fed’s decision

On the eve of the announcement of the Federal Reserve's interest rate decision, U.S. technology stocks surged, driving the Taiwanese stock market to rebound strongly by nearly a thousand points today. Foreign capital also returned to buy, and the pressure on hot money remittances eased, pushing the New Taiwan dollar to rise for two consecutive days. It finally closed at 32.418 yuan, an appreciation of 3.4 cents. The exchange rate had two consecutive reds, and the total trading volume dropped to US$2.488 billion.

Taiwan stocks surged 939.35 points today, closing at 47035.58 points, with a transaction value of 722.135 billion yuan. The three major legal persons simultaneously bought more than 29.894 billion yuan, of which foreign investors bought more than 15.922 billion yuan.

After the exchange rate of the New Taiwan dollar stopped depreciating yesterday, it opened at 32.44 yuan in early trading today. The highest intraday rise was 32.398 yuan and the lowest was 32.498 yuan. The fluctuation range has converged, but the depreciation pressure from foreign capital has significantly slowed down.

The market is currently waiting for the Federal Reserve's interest rate decision to be released tomorrow morning. It is generally expected that interest rates will be suspended this time, but there is still uncertainty about whether to raise interest rates again in December. Since there are no routine economic forecasts and dot plots this time, the market will focus on the wording of the post-meeting statement and Chairman Washer's remarks to judge the possibility of further tightening before the end of the year.

The Bank of Japan will hold a two-day policy meeting starting tomorrow and announce its decision on the 30th. The market expects that after raising interest rates in September, the policy rate will be maintained at 1.25% this time. The focus of observation includes the latest economic and price outlook, and whether President Kazuo Ueda sends a signal to raise interest rates again in December.

Looking forward to the market outlook for the New Taiwan Dollar, in the short term we still need to observe the trends of the US dollar and the yen after the decisions of the two major central banks, as well as whether foreign capital's overbuying of Taiwanese stocks can continue and drive capital inflows. Foreign exchange selling by exporters at the end of the month is expected to provide support, but if the Federal Reserve maintains its hawkish stance and the U.S. dollar continues to be at a high level, it may still limit the Taiwan dollar's rise; if the U.S. dollar falls, coupled with the inflow of foreign capital, it will help the Taiwan dollar continue to rebound.

According to statistics from the central bank, as of 4 p.m., the U.S. dollar index rose by 0.24%, the Japanese yen appreciated by 0.05%, the Taiwan dollar appreciated by 0.1%, the RMB appreciated by 0.01%, the Singapore dollar depreciated by 0.04%, and the Korean won fell by 0.89%.