Pressured by a selloff in international AI-related stocks, foreign investors on Tuesday sold an unusually large amount of Taiwan equities exceeding NT$100 billion, with the resulting outflows driving the Taiwan dollar to plunge more than 1% in the afternoon session, marking its largest intraday decline since June 30, 2025.
According to preliminary exchange data, foreign investors sold a net NT$165.3 billion of Taiwan stocks, the third-largest net selling amount since Bloomberg began compiling the data.
Taiwan Semiconductor Manufacturing Co , which is scheduled to report earnings this Thursday, fell nearly 2%, dragging the broader market down by a similar margin by the close.
The Taiwan dollar weakened by as much as nearly 1.1% against the US dollar intraday, touching 32.237, its weakest intraday level in nearly two months, before paring some of the losses.
The Taiwan dollar had already breached the NT$32 mark in early trading, with traders saying in the morning that exporters' US dollar selling was somewhat on the sidelines.
Fiona Lim, a senior foreign exchange strategist at Maybank, said in an interview that overnight concerns about the outlook for memory chips had spilled over into Asia. Both the Taiwan dollar and the Korean won were affected by stock-market-related capital outflows. Rising oil prices added further pressure, intensifying risk-averse sentiment in the market.
A single-day move of more than 1% in either direction for the Taiwan dollar is extremely rare. In early May 2025, the Taiwan dollar staged an epic rally, driven mainly by panic selling of US dollars by exporters and inflows from foreign investors. Then on June 30 last year, the Taiwan dollar tumbled 2.5%, its largest drop in more than 24 years, fueling speculation that the central bank might intervene again to curb the currency's appreciation.
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