TAIPEI (Taiwan News) — Amid a major selloff in Taiwan’s stock market, the New Taiwan Dollar fell to its lowest level against the US dollar in nearly nine years on Monday.
Taiwan faced a double downturn in the stock and currency markets, with the TAIEX, the weighted index on the Taiwan Stock Exchange, plunging over 500 points during intraday trading to fall below the 23,000-point threshold, according to CNA. Meanwhile, the NTD opened at NT$32.98 and quickly breached the psychological NT$33-per-dollar mark against the US dollar shortly after trading began.
A stronger-than-expected US jobs report released on Friday dampened hopes for interest rate cuts this year, pushing US stocks lower. The US Dollar Index, which measures the dollar’s value against a basket of six major currencies, approached the key 110 level.
The combination of a strong dollar and Monday’s Taiwan stock market slump caused the NTD to weaken further, reaching an intraday low of NT$33.136 per dollar. This marked the first time since March 2016 that the NTD had dropped below the NT$33-per-dollar level.
Currency market analysts said the NTD was already approaching NT$33 last week, so Monday’s depreciation was anticipated. The currency's future movement will depend on whether the US dollar successfully surpasses the 110 mark and the selling momentum from Taiwanese exporters’ foreign exchange holdings. However, analysts predict the NTD will continue to trend lower.
In the Taiwan stock market, the combination of US stock declines and selling pressure ahead of the Lunar New Year holiday caused the market to open higher before trending lower. The Taiex closed down 2.28% at 22,488, a drop of 523.53 points. The NTD ended the day at NT$33.119 per dollar, with a transaction volume of US$1.926 billion.