(Bloomberg) -- The Taiwan dollar fell to its weakest in more than eight years as a selloff in shares of the world’s largest maker of advanced chips intensified outflows from local equities.
The currency dropped as much as 0.6% to 32.79 per dollar on Friday, the weakest since 2016. Global funds sold a net $1.79 billion of Taiwan equities on Thursday, according to exchange data, the most since April and the fifth straight day of outflows.
The local dollar was impacted by broad strength in the greenback and outward remittances by foreign investors despite dollar sales by exporters, said traders, who asked not to be identified because they aren’t authorized to speak publicly.
Shares of Taiwan Semiconductor Manufacturing Co. have declined over the last few sessions despite solid results after the Biden administration floated tougher trade restrictions on China. Former president Donald Trump’s comments on Taiwan taking away all of the chip business from the US and his questioning whether the US has a duty to defend Taiwan have added to investor concern.
“Rising tech stock volatility has triggered strong foreign equity outflows,” said Ju Wang, head of greater China FX and rates strategy at BNP Paribas SA. “It is a typical risk-off reaction. If the weak trend continues, we will see if authorities come out to smooth the trend.”
The benchmark Taiwan Stock Exchange Weighted Index slid more than 4% this week. TSMC shares were down more than 6% over the same period, the biggest weekly loss since April.
Taiwan dollar trading volumes jumped to the highest since 2022 on Friday. The currency is the biggest laggard among Asian currencies this month, down about 1%, and has slumped more than 6% this year.
--With assistance from Hailey Wang and Jeanny Yu.
(Updates with Taiwan share moves in 6th paragraph.)
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