The Taiwanese dollar weakened to its lowest level in a year, following a strengthening US dollar and the upcoming dividend payment season, with a total of over 2.5 trillion Taiwanese dollars, which may accelerate capital outflows from the country.
On July 9, 2569 at 14.18:XNUMX p.m., Bloomberg News reported that The Taiwan dollar (TWD) weakened to its lowest level since April 2568. During Thursday's trading, the currency weakened by as much as 0.6% to 32.210 Taiwan dollars per US dollar, effectively erasing almost all of the gains from the significant appreciation in May of last year.
This weakening occurs amid a strengthening US dollar and the start of dividend payment season for listed companies in Taiwan, which may encourage foreign investors to convert Taiwanese dollars back into US dollars.
The Taiwan Stock Exchange revealed that listed companies are preparing to pay out a total of more than NT$2.5 trillion, or approximately US$77,700 billion, in dividends this year, the highest value since data collection began in 2533. This is especially true for semiconductor companies, which have a high proportion of foreign ownership, increasing the likelihood of selling pressure on the Taiwan dollar as they seek to convert it back into US dollars.
Furthermore, the Taiwanese dollar faced pressure from external factors after the US dollar strengthened on market expectations that US interest rates would remain high for an extended period, leading to a tendency for capital to flow back into dollar-denominated assets.
Khoon Goh, Head of Asia Research at Australia & New Zealand Banking Group. It was stated that today's weakening of the Taiwanese dollar is likely due to foreign investors repatriating dividend payments, especially after Taiwan Semiconductor Manufacturing Company paid its quarterly dividend. The high proportion of foreign shareholders created buying pressure on the US dollar, putting downward pressure on the Taiwanese dollar.
He expects the Taiwanese dollar to face continued pressure in the short term and could weaken to around 32.5 Taiwanese dollars per US dollar if dividend payments for the remainder of the month continue to draw capital outflows from the country.
refer : bloomberg.com
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