The New Taiwan dollar showed signs of stabilizing yesterday after a recent surge, but local shares still closed slightly lower as investors remained concerned over possible US tariffs on semiconductor imports.
The NT dollar reversed its steep rise in the previous two sessions, closing down NT$0.135, or 0.45 percent, at NT$30.280 against the US dollar in Taipei trading.
The NT dollar led volatile moves in Asia earlier this month, surging as much as 5 percent against the US dollar on Monday, its biggest single-day gain since the 1980s.
Photo: CNA
The rally was fueled by exporters rushing to convert US dollar holdings and signs that life insurers might have been hedging their greenback-denominated portfolios.
However, it edged lower yesterday amid a broader pullback in Asian currencies.
Central bank Governor Yang Chin-long (楊金龍) on Monday said that speculative activity had driven the sharp appreciation, prompting the bank to intervene early this month.
Yang attributed part of the sharp rise to analyst statements that the NT dollar might rise, calling for them to tamp down their chatter.
President William Lai (賴清德) and the Cabinet’s Office of Trade Negotiations have denied that the currency has been discussed during talks with the US, which has threatened to impose a 32 percent tariff on Taiwanese exports.
While the local currency stabilized after its sharp rally earlier this week, the TAIEX closed down 10.40 points, or 0.05 percent, at 20,522.59 yesterday, as concerns over potential US semiconductor tariffs weighed on sentiment.
After opening down 179.11 points, the market rebounded and reached its intraday high just before noon. However, selling pressure intensified later in the session, particularly in large-cap semiconductor stocks, dragging the TAIEX into negative territory by the close.
“Investors seemed relieved to some extent after the central bank, the largest player in Taiwan’s currency market, said volatility was over,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said.
However, “possible tariffs on semiconductors returned to hurt sentiment. So Taiwan Semiconductor Manufacturing Co [TSMC, 台積電] came under pressure, dragging the broader market lower,” he said.
TSMC, the world’s largest contract chipmaker and also the most heavily weighted stock on the local main board, lost 1.92 percent.
However, easing concerns over the impact of currency fluctuations on insurers’ overseas assets lent support to the financial sector.
Cathay Financial Holding Co (國泰金控) rose 2.19 percent, while E.Sun Financial Holding Co (玉山金控) gained 2.69 percent. In contrast, Fubon Financial Holding Co (富邦金控) slipped 1.25 percent.
With the NT dollar’s unprecedented two-day rally subsiding, investor attention is now turning to the US Federal Reserve’s policy meeting today.
While the Fed is widely expected to keep rates unchanged, the meeting might be the last with such a clear-cut outcome.
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said second-quarter revenue is expected to surpass the first quarter, which rose 30 percent year-on-year to NT$118.92 billion (US$3.71 billion). Revenue this quarter is likely to grow, as US clients have front-loaded orders ahead of US President Donald Trump’s planned tariffs on Taiwanese goods, Delta chairman Ping Cheng (鄭平) said at an earnings conference in Taipei, referring to the 90-day pause in tariff implementation Trump announced on April 9. While situations in the third and fourth quarters remain unclear, “We will not halt our long-term deployments and do not plan to
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
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
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