TSMC leads Taiwan stocks to new highs, New Taiwan dollar rises above 31.8 yuan
Quick Look
- TSMC drove Taiwan stocks to new highs, and the return of hot money pushed the New Taiwan dollar against the U.S. dollar above the 31.8 yuan mark, reaching a maximum of 31.75 yuan in early trading.
- Affected by the weaker-than-expected U.S. non-farm payrolls data, the market expected the Fed to The probability of interest rate hikes in October has dropped to less than 20%.
- The US dollar has fallen back, but its decline is limited by international oil prices and US bond yields.
AI-generated summary
Why It Matters
TSMC is Taiwan's largest semiconductor company, and its stock price performance is often regarded as a benchmark for Taiwanese stocks. U.S. non-farm payrolls data is an important indicator that affects the Federal Reserve's monetary policy. Recent data shows that the labor market has cooled, reducing expectations for interest rate hikes.
TSMC leads Taiwan stocks to hit new highs, with the New Taiwan dollar rising above the 31.8 yuan mark. (Photo by reporter Chen Meiying)
[Reporter Chen Meiying/Report from Taipei] Taiwan Semiconductor Manufacturing Co., Ltd. led Taiwan stocks to hit new highs. The inflow of hot money also drove the exchange rate of the New Taiwan dollar against the US dollar to rise. It rose to a maximum of 31.75 yuan in early trading and temporarily closed at 31.78 yuan at noon, an appreciation of 5 cents. The trading volume of Taipei Foreign Exchange Brokerage Company was US$726 million.
The U.S. announced last Friday that there were only 29,000 new non-farm jobs in September, far lower than market expectations, and the data from previous months were also revised down; the unemployment rate rose to 4.2%, and the labor market cooled. According to the CME Group's FedWatch tool, the probability of the Federal Reserve raising interest rates in October has dropped significantly to less than 20%. As a result, the U.S. dollar has fallen back. However, international oil prices and U.S. bond yields are still at high levels, and the U.S. dollar's decline has been limited. The U.S. dollar has rebounded again this morning, and the rise of major Asian currencies is still under pressure.
Please read on...
The New Taiwan dollar opened at 31.81 yuan this morning, appreciating 2 cents. As the Taiwan stock market continued to reach new highs, foreign hot money returned and returned to the price of 31.7 yuan again, reaching a maximum of 31.75 yuan, more than a week's high.
People from Huiyin pointed out that although the trend of the New Taiwan Dollar was weak last week, reaching as low as 31.946 yuan, it still did not fall below the 32 yuan mark. As the Taiwan stock market strengthened again, the New Taiwan Dollar rose above the 31.8 yuan mark this morning and has the opportunity to move closer to 31.7 yuan. Whether it can continue to strengthen depends on the strength of foreign capital inflows.
After the release of the non-farm payrolls report, the market believes that there is a 70% to 80% chance that the Fed will be on hold this month. The market focus now turns to the minutes of the September meeting to be released this Wednesday.
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What to Watch
AI outlook — possibilities, not facts
The New Taiwan Dollar will move closer to the 31.7 yuan level in the short term
Likely · Within days
Fed to keep interest rates unchanged at October meeting
Very likely · Within weeks
Open Questions
- How long will the return of foreign hot money last?
- Can the New Taiwan Dollar break through the 31.7 yuan level?
- Will the Fed's October meeting really be on hold?
