Published: · Region: East Asia · Category: markets

Yuan hits multi‑year high as Taiwan’s TAIEX slides to two‑month low

China’s onshore yuan has strengthened to 6.66 per dollar in early trade, its highest level since June 2022, after the central bank set its firmest reference rate since February 2023. At the same time, Taiwan’s TAIEX index has fallen 3.5% to 44,726.26, the weakest level since August 25, underlining a sharp contrast in sentiment across the Taiwan Strait.

Currency and equity markets around the Taiwan Strait are sending sharply different signals.

In mainland China, the onshore yuan strengthened in early trading on 30 October to 6.66 per U.S. dollar, its highest level since June 2022. The move followed a decision by the People’s Bank of China to set its daily yuan reference rate at the strongest level since 2 February 2023, a step that supports the currency.

Across the water, Taiwan’s TAIEX benchmark index dropped 3.5% to 44,726.26, its lowest close since 25 August. The report did not specify which stocks led the fall, but the size of the decline points to a broad move by investors out of Taiwanese equities.

For investors, the combination of a firmer yuan guided by China’s central bank and a sharp fall in Taiwan’s stock market highlights a split between managed currency strength on the mainland and weaker risk appetite on the island.

Signals to watch now include how tightly the People’s Bank of China continues to hold the yuan through its reference rate, whether the TAIEX stabilizes or extends its losses, and any policy or geopolitical developments that might explain or reinforce the current divergence.

Sources

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