TAIWAN-ECONOMY-CURRENCY
The New Taiwan dollar closed at NT$32.265 against the US dollar on October 15, depreciating by 1.92 cents on the day, with foreign exchange trading volume reaching US$7.03 billion. The market continues to focus on US inflation data, interest rate expectations, and international capital flows.

The Taiwan dollar weakened sharply against the US dollar in Taipei trading on Thursday, closing at NT$32.265, down NT$0.192 from the previous session. Trading volume reached US$7.03 billion as volatility in the foreign-exchange market increased and investors continued to monitor US inflation, Federal Reserve interest-rate policy and international capital flows.

According to a Central News Agency (CNA) report, the Taiwan dollar opened at NT$32.11 against the US dollar on Thursday and reached the same level at its intraday high before falling to a low of NT$32.452, indicating a wider trading range.

Foreign-exchange market movements remain closely tied to the latest US economic data and expectations for interest rates. The US Consumer Price Index rose 3.7% year on year in September, exceeding the market forecast of 3.6% and prompting investors to reassess the Federal Reserve’s future monetary-policy direction. If US interest rates remain elevated, dollar-denominated assets could continue to attract some international capital, putting pressure on other currencies.

Taiwan’s stock market also suffered a sharp decline on the same day. According to another CNA market report, the Taiex fell 1,655.96 points, or 3.41%, with semiconductor and electronics stocks bearing the brunt of selling pressure. Simultaneous volatility in the stock and foreign-exchange markets reflected investors’ renewed assessment of risks facing the global economy and technology sector.

Movements in the Taiwan dollar have differing effects on Taiwan exporters, importers and companies holding overseas assets. A weaker Taiwan dollar may improve the price competitiveness of exports, but it can also raise the cost of importing US dollar-denominated raw materials, energy and equipment. For companies, exchange-rate changes can also affect financial statements, hedging strategies and the management of funds.

Markets will continue to watch US inflation data, comments from Federal Reserve officials, the performance of international stock markets and foreign fund flows. Because exchange rates are influenced by multiple factors, a single day’s movement is not enough to determine the Taiwan dollar’s medium- to long-term direction.