Taiwan is the country which relies on foreign trade and the value of import and export markets accounts for eighty percent of the Gross Net Product¡]GNP¡^. It is obvious that the feature of economic system in island highly depends on the existence of foreign trade. Therefore, exchange rate is considered as one of the major indexes for Taiwan¡¦s economic activities. Federal Reserve System¡]FED¡^has constantly begun to lower the interest rate for thirteen times since 2001, and this would influence the trends of the interest rate of the whole world. Also, it seems that reducing the interest rate promotes the low interest which leads to a more prosperous economy in Taiwan society than before. It is clear, thus, that the interest is regarded as a major variable in economic system. The stock market of Taiwan has shifted from bear market to bullish one since 2002 and it would have developed the bullish market for almost ten years. According to this phenomenon, the issue of how to evaluate the trend of the stock index has been becoming important for Taiwanese investors to explore the stock market. This study is based on the observation of the relationships between the stock index and the two rates, exchange and interest rates. It is hoping, by doing so, that investors can obtain sufficient information and successfully estimate different aspects of investing trends in the stock market in Taiwan.