TWD Stock and Forex Move Divergently! Sharp 1.46-cent Depreciation Holds Key 32.5 Level, High-Low Spread Nearly 3 Cents

Taipei's stock and foreign exchange markets showed divergent trends today (3rd). The main index rebounded by over 260 points, while the New Taiwan Dollar (TWD) against the US dollar initially rose but later fell sharply. Foreign investors turned net sellers, causing the exchange rate to swing dramatically—reaching a high-low spread of nearly 3 cents. However, the central bank stepped in forcefully to stabilize the currency, narrowing the day's depreciation. The TWD closed at 32.438, down 1.46 cents, with total forex trading volume in Taipei and Yuan Ta reaching a record high of $3.92 billion.

The TWD opened at 32.26, briefly rising to 32.21 (an 8.2-cent appreciation), but foreign institutional investors and importers began buying US dollars, pushing the exchange rate into negative territory. It successively broke below the 32.3 and 32.4 levels, hitting a low of 32.49—nearly a 20-cent depreciation—and clearly decoupling from the strong yen movement.

Given the excessive short-term depreciation and divergence from broader Asian currency trends, the central bank intensified its defense to protect the psychological 32.5 threshold. Through late-session intervention, the depreciation narrowed, and the currency closed at 32.438, down 1.46 cents for the day.

Optimism over US-Iran negotiations drove crude oil prices down over 4%, causing the US Dollar Index to fall below 100. Meanwhile, coordinated intervention by the US and Japan boosted the yen by 2.18% in a single day. The South Korean won also appreciated by 0.16%, while the Chinese yuan depreciated slightly by 0.08%. In contrast, the TWD plunged by 0.45%, making it the weakest currency in Asia.

The Taiwan stock market rose 266.66 points, closing at 43,386.41. Although TSMC weakened, MediaTek and ASE Holding led a surge with limit-up gains. Passive components, CPO, memory, and substrate sectors performed strongly, with multiple stocks hitting their daily trading limits. Foreign investors sold a net NT$19.2 billion worth of shares.