## Will the New Taiwan Dollar Still Depreciate? The Truth Behind This Rebound

Recently, the New Taiwan Dollar against the US dollar briefly fell below the 31.4 mark, sparking market concerns about continued depreciation. But the situation has recently turned—today, the New Taiwan Dollar rebounded strongly to 31.405, appreciating by 4.2 cents, causing many to exclaim, "Hot money is coming back!" So the question is: **Can this rebound continue? Will the New Taiwan Dollar keep depreciating?**

**The Weakening US Dollar Is the Key Trigger**

The turnaround of the New Taiwan Dollar is driven by an important shift—the Federal Reserve's stance has softened. As Fed officials have gradually signaled dovish intentions, market expectations for a rate cut in December have risen significantly. This directly impacted the US dollar index, which has been sliding from its high point and is now oscillating around 100.16. When the dollar weakens, Asian currencies naturally benefit; the Japanese yen, Korean won, and other major Asian currencies have all seen opportunities to rebound.

**Taiwan Stocks Surge, Attracting Foreign Investment**

In addition to the Fed's dovish effect, today’s sharp rise in Taiwan stocks also played a significant role. Leading electronic blue-chip stocks surged, and by the end of the month, there was real demand from exporters to convert foreign currency, creating a "rising together in stocks and forex" scenario. The New Taiwan Dollar opened at 31.42 and quickly surged to 31.405, demonstrating a clear appreciation momentum.

**But Risks Should Not Be Ignored**

However, how far this rally can go remains uncertain. Analysts point out that although the US dollar index has retreated from its high, it still remains above the 100 level, indicating that the overall dollar trend remains relatively strong. In other words, the appreciation potential of the New Taiwan Dollar is quite constrained. Currently, the New Taiwan Dollar is fluctuating around 31.415. **Will the Taiwan Dollar still depreciate?** The key depends on foreign capital flows and the subsequent strength or weakness of the US dollar.

**Market Consensus: Dual Momentum Supports Short-Term Trends**

Industry insiders believe that two main forces are driving the rebound of the New Taiwan Dollar. First, the renewed expectation of Fed rate cuts has weakened the dollar. Second, the impressive performance of Taiwan stocks has attracted foreign capital inflows. As long as these two drivers continue, the New Taiwan Dollar even has the chance to challenge the 31.3 support level.

**Hidden Variables Cannot Be Ignored**

However, market participants also remind that many variables still exist in the international currency markets. US economic data, whether good or bad, will influence Fed policy expectations, and changes in China's economic situation will also impact the entire Asian forex market. This is why a short-term rebound alone makes it difficult to determine the long-term trend.

**Practical Trading Recommendations**

For exporters, it might be a good idea to convert currency near the high point around 31.4; importers can patiently wait for a pullback before entering positions.

**Conclusion: Beware of Long-Term Risks Amid Short-Term Rebounds**

This wave of strong appreciation in the New Taiwan Dollar has indeed brought an optimistic atmosphere to the market. The inflow of hot money and the strong demand from exporters to convert foreign currency are positive signals. But whether the Taiwan Dollar will continue to depreciate depends on the Fed's policy direction and whether the US dollar index can effectively break below 100. In the current environment of high global economic uncertainty, the risks of a deep correction after the short-term rebound are also worth noting. Investors should remain cautious of subsequent variables even while optimistic.