Foreign capital floods back! The New Taiwan dollar exchange rate hits the 31.4 level for the first time, and the market detects two major signals

Dovish Fed Tone Boosts US Dollar Weakening from High Levels

Things happened quickly and suddenly. Recently, Federal Reserve policymakers have repeatedly expressed a dovish stance, leading the market to seriously speculate whether interest rate cuts will begin in December. As a result, the US Dollar Index has sharply retreated from its peak and is currently holding around 100.16. This shift is undoubtedly good news for long-suppressed Asian currencies, with major Asian currencies such as the Yen, Korean Won, and New Taiwan Dollar all rebounding in response.

NTD Exchange Rate Rally Excites Market, 31.405 Becomes a Highlight

Today’s market is full of highlights. The Taiwan stock market is performing a spectacular rally driven by technology heavyweight stocks. Coincidentally, it’s also the end of the month accounting period, with export companies submitting currency hedging orders en masse, creating a scenario of both stock and currency appreciation. The New Taiwan Dollar exchange rate opened early at 31.42 and quickly surged to 31.405, an increase of 4.2 points. This momentum truly caught the market’s attention.

Signals of Hot Money Inflow Emerge, but Appreciation Still Has a Ceiling

Analysts unanimously point out a phenomenon: although currencies across Asia are rising, the US Dollar Index remains firmly above the 100 level, maintaining strong resilience in the global dollar landscape. This results in limited gains for Asian currencies, including the New Taiwan Dollar. Currently, the NTD fluctuates around 31.415, and further upward movement requires stronger momentum.

Dual Drivers Intertwined, 31.3 Becomes Next Target

Market participants generally agree that two forces are driving the recent NTD appreciation: one is the renewed expectation of Fed rate cuts leading to US dollar depreciation, and the other is the inflow of international capital attracted by the stock market rally. If these two drivers continue to strengthen, the New Taiwan Dollar may challenge the key level of 31.3.

Variables Still Exist, Traders Remain Cautious

Although market sentiment has improved, many uncertainties remain. Traders advise investors not to let their guard down. Besides closely monitoring the latest US economic data, they should also pay attention to the potential impact of China’s economic developments on the entire Asian currency system. Practically, exporters can consider moderately selling around 31.4, while importers might wait for a price retracement before re-entering positions.

Future Focus: Whether the New Taiwan Dollar Can Hold Its Ground Is Key

This rally in the New Taiwan Dollar has boosted market confidence. With both foreign capital inflows and local exporters’ hedging demands supporting the currency, whether the NTD can remain firmly above 31.4 will be the most important indicator to watch for the next trend.