FX.co ★ Taiwanese Dollar Hits Lowest in Over 2 Months

The Taiwanese dollar weakened beyond 32.3 per US dollar, its softest level since early August, as a sharp selloff in global semiconductor stocks hit regional currencies and reduced appetite for technology-related assets. Taiwan’s equity market fell more than 3%—its biggest one-day drop since July—amid worries over persistently high US interest rates, stretched share valuations, and the payoff from large-scale investments in artificial intelligence, all of which drove foreign investors to withdraw capital from the region.

On Tuesday, foreign investors sold a net NT$165.3 billion in Taiwanese equities, the third-largest single-day outflow on record, with selling continuing for a sixth straight session on Wednesday. Stronger-than-expected US inflation data intensified fears of further Federal Reserve rate hikes, adding additional downward pressure on Asian currencies. Even so, declining US Treasury yields and lower oil prices provided some relief, while state-owned banks stepped in to support liquidity in the domestic foreign exchange market.