Stocks and Currency Diverge: New Taiwan Dollar Weakens with Asian Currencies, Ending 2-Day Rally

(CNA) Taipei, July 1 - The Taiwan stock market showed strong performance today, successfully reclaiming the 47,000-point mark, and foreign investors also ended their six-day selling streak. However, the New Taiwan dollar did not move in tandem, weakening due to continued foreign exchange outflows and a general decline in Asian currencies. The New Taiwan dollar closed at NT$31.874 against the US dollar, depreciating by 3.7 cents. Total transaction volume in the Taipei and Yuan Ta foreign exchange markets was US$2.573 billion.

Fueled by anticipation of TSMC's earnings call, the Taiwan stock market surged over a thousand points in early trading. The gains later narrowed, and the market fluctuated, largely hovering around the 47,000-point level. In the final trading session, TSMC's stock price rose to its daily high of NT$2,505, driving the main stock index up by 893.08 points to close at 47,018.99 points, surpassing the 47,000-point threshold.

Foreign investors also refrained from heavy selling of Taiwan stocks. Their selling amounts had significantly decreased in the preceding days, and today they turned to net buying of NT$32.3 billion, ending their six-day selling streak.

Despite positive signals from the stock market, the currency and stock movements diverged. The New Taiwan dollar opened at NT$31.81 against the US dollar today. It fluctuated in early trading, but near noon, foreign investors increased their outflow pressure, and large oil payment purchases also entered the market. The exchange rate turned from appreciation to depreciation, and the decline continued to widen, reaching an intraday low of NT$31.9.

Foreign exchange traders stated that export companies' demand for selling foreign currency has concluded and significantly reduced today. Furthermore, as the season for dividend payouts approaches, foreign investors convert dividends into foreign currency for repatriation, creating downward pressure on the New Taiwan dollar. Externally, the market faces a continued strong US dollar and a general weakening of Asian currencies, leading to the New Taiwan dollar's depreciation.

Central Bank statistics showed the performance of major Asian currencies today. The US dollar index rose slightly by 0.01%, and Asian currencies showed sluggish sentiment. The New Taiwan dollar, Chinese Yuan, and Korean Won all depreciated by 0.12%. The Japanese Yen experienced a heavier decline, falling by 0.25%. (Edited by Lin Chia-han) 1150701

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