Foreign Capital Outflow Increases Before Trump-Xi Meeting, New Taiwan Dollar Depreciates to 31.48 Amid High Volume

TAIPEI, May 12 (CNA reporter Pan Tzu-yu) – With US President Trump scheduled to arrive in Beijing on the 13th for the 'Trump-Xi meeting' with Chinese President Xi Jinping, the market has turned cautious. Foreign capital outflow intensified in the afternoon, driving a significant increase in trading volume. The New Taiwan Dollar closed today at 31.48 against the US Dollar, depreciating by 6.5 cents. The total transaction amount in the Taipei and Yuanta foreign exchange markets surged to US$3.2575 billion, the highest in nearly a month.

As the US-Iran conflict remains deadlocked and the globally anticipated 'Trump-Xi meeting' is about to take place, investors are closely monitoring the developments in international political and economic situations. Market uncertainty has risen, with the US Dollar Index consolidating at a high level, rising 0.29% today. Asian currencies generally weakened, with the Renminbi remaining stable, the New Taiwan Dollar depreciating by 0.21%, the Japanese Yen falling by 0.24%, and the Korean Won plummeting by 1.07%.

The New Taiwan Dollar opened today at 31.43 against the US Dollar. Following the rise in the Taiwan stock market, it appreciated to an intraday high of 31.395 in the morning. Subsequently, the Taiwan stock market turned negative, coupled with a surge in US Dollar buying from importers, putting pressure on the exchange rate, which then fluctuated around 31.4.

Despite the Taiwan stock market closing higher, foreign investors have been net sellers for three consecutive days, with today's net selling amount expanding to NT$30.494 billion. The wave of capital outflow intensified the depreciation pressure on the New Taiwan Dollar. In the afternoon, the New Taiwan Dollar's depreciation rapidly expanded, breaking the important 31.5 mark, touching a low of 31.548, with the depreciation widening to over 1 cent.

Foreign exchange traders pointed out that the breakdown in US-Iran talks and the renewed rise in international oil prices suppressed risk appetite. Coupled with the impending Trump-Xi meeting, the market tended to be cautious, and foreign investors consequently withdrew funds, leading to the depreciation of the New Taiwan Dollar. However, it still remains within its previous trading range.

Foreign exchange traders stated that the New Taiwan Dollar's exchange rate has recently been primarily driven by capital flows. Although short-term news is mixed and foreign investors are taking defensive positions, the Taiwan stock market continues to challenge the 42,000-point mark, indicating that momentum remains. If the international situation clarifies and no new negative factors emerge, the New Taiwan Dollar should return to an appreciating trend. (Editor: Lin Chia-hsien) 1150512

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