Foreign Capital Outflow Pressure Reappears, New Taiwan Dollar Closes at 31.91, Nearing the 32 Mark

(CNA, Taipei, July 2nd) Fed Chairman Powell did not signal a more hawkish stance, causing the international US dollar to fall slightly and allowing Asian currencies to breathe a sigh of relief. However, in the afternoon, foreign capital increased its outflow pressure, causing the New Taiwan Dollar to depreciate against the US Dollar, once again approaching the 32 mark. The closing price was 31.91, a depreciation of 3.6 cents, marking a nearly 3-month low. The total transaction volume in the Taipei and Yuanta foreign exchange markets increased to 2.898 billion US dollars.

The sharp decline in US chip stocks impacted the performance of the Taiwan Stock Exchange today. The weighted index fell over a thousand points in early trading, breaking below the 46,000-point mark. The decline narrowed during the session, with the index closing down 274.83 points at 46,744.16 points.

Financial market sentiment can change in an instant. Foreign investors had just ended six consecutive days of selling and turned to buying Taiwan stocks yesterday, but today they sold off NT$89.046 billion again. They continued to remit capital abroad in the foreign exchange market, creating depreciation pressure.

The New Taiwan Dollar opened at 31.88 against the US Dollar today. In the morning, it reflected the decline in the US dollar, and the exchange rate briefly rose, reaching a high of 31.835 during the session. However, the situation changed in the afternoon as foreign capital increased its outflow pressure. The exchange rate fell below 31.9, and the intraday low reached 31.952, once again nearing the 32 integer mark.

Foreign exchange traders stated that Powell's remarks at the European Central Bank forum were largely in line with market expectations and did not signal a more hawkish stance. However, he emphasized close monitoring of inflation developments, causing the US dollar index to enter a period of weak consolidation. Investors are refocusing on subsequent US economic data to determine the Federal Reserve's monetary policy direction. While the external situation remains unclear, domestically, foreign investors' expanded selling and continued capital outflows have led to the New Taiwan Dollar's depreciation.

The New Taiwan Dollar's closing price against the US Dollar today fell below the 31.9 level, moving another step closer to the 32 integer mark. Foreign exchange traders believe that July and August are peak seasons for dividend payouts. The wave of foreign capital outflows after receiving dividends may exacerbate the depreciation. In the short term, the New Taiwan Dollar may test 32. However, this year, the high-tech industry has benefited from AI dividends, with exports booming. Remittance demand is expected to provide some support to the exchange rate, and even if it weakens, it should be a gradual depreciation.

The Central Bank's statistics on major Asian currency movements show that as the US dollar index fell by 0.34%, most Asian currencies rebounded. The Chinese Yuan appreciated by 0.09%, the Korean Won rose by 0.4%, and the Japanese Yen, after a sharp decline, staged a strong rebound, surging by 0.77%. The New Taiwan Dollar was the only one to weaken, depreciating by 0.11%. (Editor: Lin Shuyuan) 1150702

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