The situation in the Middle East has heated up, and international oil prices have risen, raising concerns about inflation. U.S. bond yields have continued to remain at a high level, and highly valued technology stocks have borne the brunt. When Taiwanese stocks fell under TSMC, foreign investors oversold more than 165.3 billion yuan, setting a record for the third time in history. After foreign investors oversold, hot money was repatriated on a large scale, which also intensified the decline of the Taiwan dollar against the US dollar. Not only did it fall below the 32 yuan mark, but it also dropped to 32.237 yuan, a depreciation of more than 3 cents, the first time since June 30 last year.
At the end of the day, the central bank took action to stabilize the exchange rate, but it was still unable to resist the pressure of foreign hot money to remit. It finally closed at 32.085 yuan, a depreciation of 1.9 cents. The total of Taipei and Yuantai Foreign Exchange Brokerage Company reached 5.433 billion U.S. dollars, which was the second highest record in history, only lower than the record in 2008 when Ma Ying-jeou was elected.
Taiwan stocks fell 960.65 points today to close at 48,341.31 points, with the three major legal entities selling over 198.446 billion yuan in total. Among them, foreign capital sales exceeded 165.342 billion yuan, setting the third largest single-day overselling amount by foreign capital.
Taiwan's stocks are at a relatively high-end position, and as uncertainty in the international financial market increases, foreign capital has adjusted to higher prices this year, and capital flows have become an important factor affecting the trend of stocks and exchange rates. However, compared with the previous two large-scale overselling by foreign capital, today's reaction in the Taiwan dollar foreign exchange market was particularly violent.
Observing that on July 17 this year, foreign investors oversold Taiwanese stocks by 189.039 billion yuan, and on June 24, they sold over 177.419 billion yuan, which were the highest and second highest overselling records in history respectively. However, the intraday loss of the New Taiwan dollar did not reach 2 cents. In comparison, although the amount of overselling by foreign investors today was lower than the previous two times, the exchange rate depreciated by 3.42 cents during the session. Foreign investors did not look back, and their intention to remit money directly after overselling was quite obvious.
According to Huiyin estimates, the amount of foreign remittances in a single day today exceeded 2 billion U.S. dollars. The central bank actively stepped into the market to provide U.S. dollar liquidity, and the foreign exchange market exploded with huge trading volume. Since foreign investment transactions are T+1, if the trend of U.S. stocks remains sluggish tonight, it is expected that the foreign exchange market will continue to digest the remittance capacity after foreign capital oversold tomorrow, and the New Taiwan dollar may still be at a low point.
In addition to the current market focus on the progress of the situation in the Middle East, the inflation data to be released in the United States is also attracting attention. If the rise in oil prices drives the overall inflation to rebound, and the core CPI does not cool down, it may push up the US dollar and US bond yields, further suppressing the performance of Asian currencies; conversely, if the core inflation is lower than expected, the US dollar may retreat.
In addition, the market also hopes that TSMC's corporate briefing this week will bring good news and ease the pressure on foreign capital to remit.
