Foreign capital selling pressure remains heavy! The New Taiwan dollar continued to explore new lows in the band, temporarily closing at 32.627 yuan at noon.

Foreign capital selling pressure remains heavy! The New Taiwan Dollar continued to explore new lows in the band, temporarily closing at 32.627 yuan at noon (photo by reporter Chen Meiying)

[Reporter Chen Meiying/Report from Taipei] Although the US stock market Philadelphia Semiconductor Index rebounded from a deep decline yesterday, ending its eight-year black streak, and Taiwan stocks once turned red in early trading today, the market's doubts about the AI industry are still there, and the selling pressure from foreign investors has not yet been eliminated. The exchange rate of the New Taiwan dollar against the US dollar has declined early. The market continued to open lower, hitting a low of 32.627 yuan, a depreciation of 1.82 cents, setting a new low in the band. It temporarily closed at 32.616 yuan at noon, a depreciation of 1.71 cents. The trading volume of Taipei Foreign Exchange Brokerage Company still reached 1.672 billion US dollars.

Recently, the New Taiwan dollar has been affected by foreign capital's continued adjustments to technology stocks and large-scale remittances of funds after overselling. It has depreciated for 7 consecutive trading days, with a cumulative decline of more than 2%. The central bank issued a rare statement during the session yesterday to stabilize market confidence, but the New Taiwan dollar continued to be under pressure today, indicating that the pressure on foreign capital to remit has not yet eased.

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Huiyin analysts analyzed that the situation in the Middle East continues to be tense and international oil prices remain high. However, the market has previously reflected the inflationary pressure caused by rising oil prices, and the US dollar index has not strengthened further. However, oil prices remain high, inflation concerns persist, and the market is worried that the Federal Reserve will maintain high interest rates for longer, putting high-valued technology stocks under continued pressure.

On the other hand, the AI ​​industry has invested heavily in data centers and related infrastructure, and the market has begun to question whether the huge capital expenditure can bring corresponding returns. In addition, high interest rates have pushed up corporate financing costs, making technology stocks face dual pressures on profitability and valuation. Due to the high proportion of technology value stocks in Taiwan, especially semiconductor and AI-related stocks, which have experienced large gains, they have become the main targets for foreign investors to take profits and adjust their shareholdings.

Huiyin people believe that the key to when the New Taiwan dollar will stop depreciating lies in foreign investment. If foreign investors continue to outsell Taiwanese stocks and the demand for remittances does not decrease, there will still be further downward pressure on the New Taiwan Dollar. However, as the exchange rate falls, exporters' willingness to sell foreign exchange is expected to increase, and the central bank's timely introduction of adjustments will help slow down the decline.

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