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TWD Slips as Markets React to MSCI Rebalancing and Fed Outlook
cnyes · 2026-08-31
The New Taiwan Dollar weakened against the greenback amid capital outflows, though it maintained a strong monthly gain for August despite today's market pullback.
What Happened
Currency Market: The New Taiwan Dollar faced downward pressure today, briefly slipping past the 31.7 level against the U.S. dollar due to capital outflows. Intervention by the central bank and end-of-month selling by exporters helped mitigate the decline, with the currency closing at 31.666.
Equity Market: Taiwan stocks experienced significant selling pressure following the MSCI quarterly rebalancing, ending the session down 202.98 points at 46,128.47. Despite today's correction, the index posted a robust monthly performance in August, surging 3,008.72 points for a 6.98% gain.
Global Context: Hawkish commentary from Fed official Kevin Warsh regarding persistent inflation has heightened market expectations for a September rate hike. This has bolstered the U.S. Dollar Index, creating a challenging environment for most Asian currencies, with the exception of the Korean Won.
Monthly Overview: While the month ended on a volatile note for both stocks and the currency, August was overall a strong month for the TWD, which appreciated 1.94% over the period. Investors remain focused on how upcoming Federal Reserve policy decisions will influence future capital flows.