## New Taiwan Dollar's Downward Trend Difficult to Stop: Foreign Capital Continues to Exit, TWD Under Pressure Approaching 31.5 Level

The TWD faces obvious depreciation pressure. As foreign investors continue to withdraw from the market, the USD/TWD exchange rate in the afternoon suddenly broke through the 31.5 mark, closing at 31.475, a daily depreciation of 9.5 cents, hitting a nearly seven-month low. The trading volume in the forex market on that day expanded to 20.56 billion USD, reflecting increased market activity.

The performance of the Taiwan stock market is also not optimistic, with an intraday plunge of over 500 points, ultimately closing down 330 points, re-emerging as a scenario of both stocks and currencies declining. The main reason for this synchronized movement stems from large-scale selling by foreign investors. After a significant withdrawal on the previous trading day, foreign investors continued to sell off today, causing persistent buying of USD. Although exporters attempted to sell TWD to stabilize the exchange rate, they could not resist the depreciation pressure caused by capital outflows.

## Short-term Pattern Difficult to Change, Post-31.5 Support Breakdown Analyzed

Foreign exchange analyst Li Qizhan pointed out that the key to the simultaneous decline of stocks and currencies this time lies in the intensified withdrawal of foreign capital. After breaking through the 31.5 level, the TWD is expected to show short-term oscillation with a bias toward weakness. If the Taiwan stock market suffers another drop of over 500 points tomorrow, the depreciation pressure could further escalate, possibly testing the 31.6 level.

The banking and foreign exchange authorities assess that there is still room for TWD to depreciate before the end of the year. The current level of 31.5 is precisely within the range favored by exporters and within the acceptable tolerance of the central bank, forming a relatively balanced level.

## Global Variables Fuel Pressure, Asian Currencies Also Under Pressure

In addition to foreign capital factors, uncertainties in the international market are also increasing downward pressure on the TWD. Concerns about the prospects of the artificial intelligence industry continue to rise, leading to sharp fluctuations in U.S. tech stocks, which in turn impact related sectors in Taiwan. Moreover, with the Christmas holiday approaching, foreign institutions are entering holiday cycles, and their capital allocation and strategic adjustments are intensifying. As long as foreign capital continues to net out of Taiwan, the TWD will find it difficult to escape depreciation.

It is worth noting that the TWD's predicament is not an isolated phenomenon. Major Asian currencies have recently come under pressure as well. The Korean won against the USD has been steadily falling since December, approaching the psychological threshold of 1500 won, with monthly declines possibly reaching the worst since the 2008 global financial crisis, prompting the South Korean government to hold urgent meetings to seek countermeasures. The U.S. dollar index slightly retreated to around 98.2 today, while the RMB midpoint rate also edged higher.

The focus for the future has shifted to a series of economic data releases in the United States. These data will directly influence the Federal Reserve's judgment on next year's interest rate cuts and affect global capital flows. Over the past two trading days, the Taiwan stock market has fallen more than 660 points, and the synchronized decline in stocks and currencies has intensified market caution and wait-and-see sentiment.