New Taiwan Dollar Weakens to 31.78 Ahead of Holiday, Down 6.4 Cents

Although the New Taiwan Dollar (NTD) briefly strengthened today, it remained under downward pressure for most of the session, reflecting cautious capital inflows ahead of the upcoming holiday period. It closed at 31.78, down 6.4 cents from the previous day, with trading volume in Taipei slightly expanding to USD 1.841 billion.

The NTD opened at 31.75, down 3.4 cents, and initially rose to 31.71. However, increased demand for foreign exchange pushed the currency lower, reaching a daily low of 31.866. The intraday range was 1.56 cents.

Among major Asian currencies, most traded in narrow ranges due to high geopolitical uncertainty. With the U.S.-China summit ongoing, the U.S. dollar index fluctuated near the flat line. The NTD depreciated by 0.2%, South Korea's won fell around 0.2%, while the Chinese yuan and Thai baht declined by approximately 0.1%. The Japanese yen and Singapore dollar remained largely unchanged.

According to Cathay Futures Research, U.S. September services PMI rose to 58.7 and manufacturing PMI climbed to 56.7. These robust figures have reignited concerns over persistent inflation, pushing market expectations of a 25-basis-point Fed rate hike in October to 66%. As a result, U.S. Treasury yields have risen again.

Nonetheless, market rumors suggest that TSMC (2330-TW), often referred to as Taiwan’s 'national guardian deity,' will raise prices for advanced-process wafer foundry services in January next year, providing solid support for the downside of the Taiwan stock market.