Markets Await Fed Decision as New Taiwan Dollar Ends Four-Day Gain with Slight Depreciation

(CNA reporter Pan Tzu-yu, Taipei, June 17) The outcome of the U.S. Federal Reserve's interest rate meeting is imminent, and markets are holding their breath. Financial markets today were dominated by a wait-and-see sentiment, causing the New Taiwan Dollar (NTD) to trade in a narrow range against the U.S. dollar. The currency closed at 31.575, down 1.6 cents, ending its four-day consecutive appreciation. Total trading volume in the Taipei and Yuan Ta foreign exchange markets reached $2.355 billion.

This week marks a 'Super Central Bank Week.' The Bank of Japan raised interest rates by 25 basis points as expected, yet the Japanese yen remains weak, continuing to trade around the 160 level. The U.S. Federal Reserve (Fed) will announce its latest interest rate decision and economic forecast at 18:00 Taiwan time on June 18. Although a hold is highly likely, investors are closely watching the Fed's stance on inflation and future policy direction.

Ahead of the Fed's decision, both stock and foreign exchange markets saw mild fluctuations. The Taiwan Weighted Index closed in positive territory, rising 68.2 points to 45,877.39.

The NTD opened at 31.58. Due to prevailing market caution, some foreign capital moved funds out as a precaution, causing the exchange rate to consolidate narrowly around the 31.5 level. The intraday high was 31.538, and the low was 31.59, with a daily range under 6 cents and relatively thin trading volume.

Foreign exchange traders noted that investors are highly focused on the signals from this Fed meeting—not only because it marks the debut of new Fed Chair Walsh, but also because of how he will balance inflation concerns with political pressure from President Trump to cut rates.

Traders further stated that AI has been a key driver in global financial markets this year, fueling historic rallies in U.S., Taiwan, and South Korean stocks. However, concerns about asset bubbles have triggered periodic corrections. With risk appetite still elevated, the Fed's 'hawkish' or 'dovish' tone will influence market sentiment. Unexpected remarks could spark volatility. (Edited by Yang Lan-hsuan) 1150617