Taiwan's "Business Times" published an editorial titled "The Strong Dollar Who Has the World".
article said that after the opening of the US stock market on September 23, TSMC's American depositary receipt (ADR) listed in the United States once reached a new year low of $73.09 (closed at $73.87), which was almost halfway through the nearly one-year high of $145. In contrast, TSMC's stock price, which was traded in Taiwan and denominated in , was relatively narrow, with a low of 433 yuan in early July, and a drop of 37% from its nearly one-year high of 688 yuan. The gap in the decline in Taiwan and the United States stock prices reflects the depreciation of the New Taiwan dollar against the US dollar.
article then wrote that TSMC is a company with sound financial health, global market, and revenue and profits are still growing. However, ADR's stock price has been halved within one year, which is undoubtedly the victim of the strong interest rate hike of the Federal Reserve . This also explains the main considerations of foreign capital's continued selling over the Taiwan Stock Exchange and TSMC. What is worrying is that even if Taiwan makes every effort to stabilize the exchange rate , from the two-year risk-free spread between the New Taiwan dollar and the US dollar as an observation point, the US interest rate spread has approached 3 percentage points in the backstage of the Federal Reserve's interest rate hike. If it is a completely free trading market, the high interest rate spread makes the depreciation pressure of the New Taiwan dollar exchange rate unimaginable.
article said that governments around the world, especially partner countries that have formed an alliance with the United States, have suffered from the strong rise in the US dollar exchange rate and the widening interest rate spread between their bonds and US dollar public bonds. Governments and central banks are in a hurry and are still unable to maintain economic stability.
article also wrote that this reminds people of an unforgettable "famous quote" in history: In August 1971, the US economic recession and trade deficit were difficult to support the fixed exchange of US dollars and gold in the post-war Bretton Woods system. The then-President of the United States, Nixon , announced that the US dollar was decoupled from gold, which once caused great chaos in global economic and trade. Connery, then the U.S. Treasury Secretary, who participated in the decision-making, said in the face of criticism from officials from various countries: "The US dollar is our currency, but it is your problem."
The Federal Reserve ( Xinhua News Agency )
The article said that more than 50 years later, the US dollar has appreciated significantly against all major currencies in just one year. What we are worried about is that the world is highly concerned about the speeches of Federal Reserve Chairman Powell and other decision-making officials, but Powell never touched on the threat posed by the strong appreciation of the dollar to the global economy in his public speech. The Fed's every move will inevitably impact the livelihood of the global economy, enterprises and every corner of the world, but Powell only focuses on the inflation figures in the United States. The hegemonic mentality of "the US dollar is our currency, but it is your problem" has not changed in 50 years.
TSMC ADR price has been halved, and the world has also paid an extremely heavy price for the Federal Reserve. How to stop the harm of the US dollar "beating against its neighbors" and severely test the wisdom of the global central bank president.
Source: Reference Message Network
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