The New Taiwan dollar and Taiwanese stocks surged on signs that trade tensions between the world’s top two economies might start easing and as US tech earnings boosted the outlook of the nation’s semiconductor exports.
The NT dollar strengthened as much as 3.8 percent versus the US dollar to 30.815, the biggest intraday gain since January 2011, closing at NT$31.064. The benchmark TAIEX jumped 2.73 percent to outperform the region’s equity gauges.
Outlook for global trade improved after China said it is assessing possible trade talks with the US, providing a boost for the nation’s currency and shares. As the NT dollar appreciated, local exporters rushed to convert US dollars to the currency, while typical buyers of the greenback stepped back from the market, creating a feedback loop that exaggerated the move, traders said.
Photo: CNA
Still, there was no aggressive or abnormal intervention by the central bank, traders said. The monetary authority usually intervenes to iron out volatility amid wild swings in the currency market.
“The faster-than-expected pace of Taiwan dollar appreciation caught many market participants off guard, prompting a rush to convert US dollars into local currency,” Oversea-Chinese Banking Corp foreign exchange strategist Christopher Wong (黃經隆) said in Singapore. “The recent Taiwan dollar gains have also been catalyzed by prospects of dialog between US and China.”
The NT dollar’s rally has propelled it to the top of emerging Asian currency rankings this year, with a gain of nearly 6 percent versus the greenback. Other Asian currencies have also advanced amid the trade optimism, with the South Korean won and the Indonesian rupiah up more than 1 percent yesterday.
The surge in the NT dollar is backed by the largest volumes for greenback-NT dollar non-deliverable forwards, which are making a rare appearance at the top of global trading charts.
The central bank said it has not received any request from the US Department of the Treasury to push for an appreciation of Taiwan's currency, amid speculation fueled by the NT dollar's recent sharp rise against the greenback.
In a statement released on Thursday, the central bank refuted local media reports suggesting Washington had exerted pressure on Taiwan to allow its currency to strengthen.
The reports cited the so-called "Mar-a-Lago Accord" under US President Donald Trump, claiming the US had sought "reciprocal" tariffs and currency adjustments in negotiations with trading partners.
In response to the rapid appreciation of the NT dollar, Premier Cho Jung-tai (卓榮泰) said yesterday that the foreign exchange rate is largely dictated by international market conditions, and that the government did not come under any pressure to push up the local currency's value.
Cho emphasized the value of the NT dollar is decided by a market mechanism.
For Taiwanese stocks, strong US tech earnings are a significant driver, as Microsoft Corp and Meta Platforms Inc led "Magnificent Seven" stocks higher on Thursday.
“Microsoft and Meta’s capex came better than expected, suggesting that the AI [artificial intelligence] demand remains strong, which will benefit overall chip demand and Taiwan Semiconductor Manufacturing Co’s (台積電) revenue,” GF Holdings Hong Kong Corp (廣發控股) analyst Jeff Pu (蒲得宇) said in Hong Kong.
He sees expectations for softness in the US economy to weigh on the greenback and benefit the NT dollar.
Additional reporting by CNA
SEMICONDUCTOR SERVICES: A company executive said that Taiwanese firms must think about how to participate in global supply chains and lift their competitiveness Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it expects to launch its first multifunctional service center in Pingtung County in the middle of 2027, in a bid to foster a resilient high-tech facility construction ecosystem. TSMC broached the idea of creating a center two or three years ago when it started building new manufacturing capacity in the US and Japan, the company said. The center, dubbed an “ecosystem park,” would assist local manufacturing facility construction partners to upgrade their capabilities and secure more deals from other global chipmakers such as Intel Corp, Micron Technology Inc and Infineon Technologies AG, TSMC said. It
NO BREAKTHROUGH? More substantial ‘deliverables,’ such as tariff reductions, would likely be saved for a meeting between Trump and Xi later this year, a trade expert said China launched two probes targeting the US semiconductor sector on Saturday ahead of talks between the two nations in Spain this week on trade, national security and the ownership of social media platform TikTok. China’s Ministry of Commerce announced an anti-dumping investigation into certain analog integrated circuits (ICs) imported from the US. The investigation is to target some commodity interface ICs and gate driver ICs, which are commonly made by US companies such as Texas Instruments Inc and ON Semiconductor Corp. The ministry also announced an anti-discrimination probe into US measures against China’s chip sector. US measures such as export curbs and tariffs
The US on Friday penalized two Chinese firms that acquired US chipmaking equipment for China’s top chipmaker, Semiconductor Manufacturing International Corp (SMIC, 中芯國際), including them among 32 entities that were added to the US Department of Commerce’s restricted trade list, a US government posting showed. Twenty-three of the 32 are in China. GMC Semiconductor Technology (Wuxi) Co (吉姆西半導體科技) and Jicun Semiconductor Technology (Shanghai) Co (吉存半導體科技) were placed on the list, formally known as the Entity List, for acquiring equipment for SMIC Northern Integrated Circuit Manufacturing (Beijing) Corp (中芯北方積體電路) and Semiconductor Manufacturing International (Beijing) Corp (中芯北京), the US Federal Register posting said. The
India’s ban of online money-based games could drive addicts to unregulated apps and offshore platforms that pose new financial and social risks, fantasy-sports gaming experts say. Indian Prime Minister Narendra Modi’s government banned real-money online games late last month, citing financial losses and addiction, leading to a shutdown of many apps offering paid fantasy cricket, rummy and poker games. “Many will move to offshore platforms, because of the addictive nature — they will find alternate means to get that dopamine hit,” said Viren Hemrajani, a Mumbai-based fantasy cricket analyst. “It [also] leads to fraud and scams, because everything is now
RSS