U.S.-Iran Deal Offers Limited Boost as Markets Await Fed Decision, New Taiwan Dollar Edges Up

(Central News Agency reporter Pan Tzu-yu, Taipei, June 16) The U.S.-Iran agreement has boosted risk appetite, driving Taiwan's stock market higher. However, the New Taiwan Dollar (NTD) showed limited reaction, trading in a narrow range and closing up only 0.5 cent at 31.559 against the U.S. dollar—the fourth consecutive daily gain. Total trading volume in the Taipei and Yuan Ta foreign exchange markets reached USD 2.3725 billion.

With geopolitical risks easing, U.S. markets saw the Dow Jones Industrial Average and the Philadelphia Semiconductor Index close at record highs. Taiwan's stock market opened higher today but traded with volatility, ending at 45,809.19 points, up 412.2 points.

The NTD/USD pair opened at 31.569, reaching a high of 31.545 and a low of 31.59 during the session—fluctuations of less than 5 cents—trading in a tight range.

Despite continued foreign institutional buying in Taiwan's stock market—net purchases of TWD 40.798 billion today—providing support for the currency, foreign exchange traders noted that foreign investors have adopted a more conservative, two-way trading approach this week. With no clear directional force in the market, the exchange rate has been consolidating around the 31.5 level.

Traders explained that while the U.S.-Iran conflict has progressed positively, much of the news had already been priced in, limiting the fresh impact of the agreement. Further monitoring is needed on the implementation of the deal and shipping conditions in the Strait of Hormuz—meaning the situation is not yet fully resolved. Additionally, the U.S. Federal Reserve's upcoming interest rate decision is drawing significant attention. The Fed's economic growth and inflation forecasts could provide new guidance for financial markets. Until then, market sentiment remains cautious, and trading volume has clearly contracted.

This meeting will also mark the first time new Fed Chair Kevin Warsh presides over the session. Investors are closely watching how Warsh interprets inflation risks, attempting to gauge his policy mindset. After this week, with greater clarity expected on both Middle East developments and the Fed's policy stance, market direction is likely to become clearer. (Edited by Lin Shu-yuan) 1150616