Taiwan stocks plunged more than 3,700 points this morning, the largest intraday drop in history, and the exchange rate of the New Taiwan dollar against the U.S. dollar once fell below 33 yuan. However, as the Taiwan stock market converged, the strength of foreign remittances weakened, and exporters stepped up selling foreign exchange in the afternoon. It finally closed at 32.768 yuan, an appreciation of 1.08 cents, ending four consecutive losses. The total transaction volume of Taipei and Yuantai Foreign Exchange Brokerage Company was 3.156 billion US dollars.
Although the New Taiwan dollar stopped depreciating and rebounded today, it still fell by 2.9 cents, or 0.89%, this week, and the weekly trend fell into the black again.
After the US Democratic Party's victory in the midterm elections, the market re-evaluated the prospects for the expansion of artificial intelligence (AI) data centers, with chip and data center concept stocks bearing the brunt. The Dow Jones, S&P 500 and Nasdaq indexes plummeted simultaneously, the Philadelphia Semiconductor Index plunged 12.25%, and TSMC ADR also fell 10.78%.
The selling pressure on U.S. stocks extended to the Asian stock and exchange markets, with Taiwan stocks breaking 40,000 points at the opening. However, after the Guoan Fund came forward and stated that it would not rule out holding an extraordinary meeting, the Taiwan stock market converged on its falling points and ended up falling 1873.08 points to close at 39701.64 points. The total sales of the three major legal persons exceeded 114.006 billion yuan, of which foreign investors sold more than 91.188 billion yuan.
The New Taiwan dollar opened at 32.920 yuan in early trading, depreciating 4.4 cents. It once depreciated by 1.69 cents, reaching a low of 33.04 yuan, setting a new low in more than a year and a half. In the afternoon, it rose to a maximum of 32.702 yuan, a strong gain of 1.74 cents.
People from Huiyin pointed out that although the amount of oversold foreign capital in the stock market today is still nearly 100 billion yuan, foreign buying of U.S. dollars in the foreign exchange market has significantly converged. After the New Taiwan dollar fell below 33 yuan, exporters also took advantage of the relatively high point of the US dollar to enter the market and sell foreign exchange, driving the exchange rate back to the prefix 32 in the morning. In the afternoon, it rose as the force of foreign exchange selling increased, showing that the central bank's slogan yesterday was effective.
Cai Jiongmin, director of the central bank's foreign exchange department, made a public statement yesterday, reminding exporters to re-evaluate the Fed's policy and the trend of the U.S. dollar after the U.S. election. If there is an actual need to sell foreign exchange, they can handle it in batches in advance, and don't just wait for a better price.
In addition, Huiyin people also observed that the quotation of the New Taiwan Dollar's non-deliverable forward (NDF) has also risen to the prefix 32, and the market's expectations for the New Taiwan Dollar's short-term continued depreciation have also cooled down.
Looking ahead, the market will continue to digest the effects of the U.S. midterm elections and pay attention to the trend of the U.S. dollar after the U.S. non-farm payrolls data is released tonight. If technology stocks continue to correct, or foreign stock selling funds are postponed to concentrated remittances next week, the New Taiwan dollar may still test the 33 yuan level again. However, if exporters further cool down their expectations for the continued depreciation of the New Taiwan Dollar and continue to sell the U.S. dollar on highs, it will help ease the depreciation pressure on the New Taiwan Dollar.
According to statistics from the central bank, as of 4 p.m., the U.S. dollar index rose 0.44%, and the trends of major Asian currencies were divergent. The Korean won depreciated 1.02% along with the stock market, the Singapore dollar fell 0.32%, the New Taiwan dollar appreciated 0.33%, the Japanese yen and the Chinese yuan appreciated 0.16% and 0.02% respectively.
