The Australian dollar (AUD) is currently experiencing a sideways trading pattern, influenced by mixed market sentiments and recent domestic economic data. Analysts note that recent disappointing employment figures led to caution among investors, as expectations regarding the Reserve Bank of Australia's (RBA) monetary policy shift continue to evolve. Economic ties with China are poised to significantly impact AUD performance, with positive Chinese economic data likely to bolster demand for the currency.
Recent developments show a surge in Australian household spending, increasing by 1.3% in October 2025, which could lead to a rise in government bond yields and speculation of an interest rate hike by the RBA. Additionally, Australia's economy recorded a robust 2.1% annual growth rate, the fastest in two years, raising expectations for a hawkish RBA stance amid persistent inflation concerns, which reached 3.8% year-on-year in October. This blend of strong domestic data and changing RBA outlook has resulted in the AUD trading at 20.82 TWD, a notable 3.0% above its three-month average of 20.22 TWD, within a stable range between 19.86 to 20.84 TWD.
Meanwhile, the New Taiwan Dollar (TWD) is facing supportive fundamentals as Taiwan's economy is projected to grow by 7.37% in 2025, the fastest rate observed in 15 years, courtesy of heightened global demand for AI technology. Ongoing trade negotiations with the U.S. to reduce tariffs on exports and significant defense spending increases in response to geopolitical pressures from China also contribute to a positive outlook for the TWD.
Market experts suggest that the AUD's performance in relation to the TWD will depend critically on both local economic developments and the broader global sentiment towards risk-sensitive assets. With both currencies exhibiting signs of strength, the resulting exchange rate dynamics may favor continued fluctuations as external economic factors, particularly relations with China and the U.S., evolve in the coming weeks.
