The Australian dollar (AUD) has recently displayed volatility, primarily due to a mixed market sentiment influenced by underwhelming domestic employment data and adjusted expectations regarding the Reserve Bank of Australia's (RBA) monetary policy. As markets took a cautious stance, the AUD traded sideways towards the end of last week. However, optimism deriving from strong economic ties with China could provide renewed support, especially if upcoming Chinese economic data proves favorable.
Recent developments in Australia are likely to have a dual impact on the AUD. Household spending surged by 1.3% in October 2025, alongside robust GDP growth of 2.1% year-on-year, the fastest annual rate in two years. This uptick in consumer expenditure is fostering speculation about a potential interest rate hike by the RBA. Moreover, persistent inflation pressures, with consumer prices rising to 3.8% annually, have led markets to reassess the likelihood of further rate cuts, another factor favoring a stronger AUD.
Current trading conditions indicate that the AUD to New Taiwan Dollar (TWD) rate is nearing a 90-day high at 20.89, significantly higher than the 3-month average of 20.23. This positions the AUD approximately 3.2% above its recent levels, having remained in a relatively stable range of 5.2% from 19.86 to 20.89 in recent weeks.
On the other side of the equation, the New Taiwan Dollar is being influenced by strong economic growth projections, with Taiwan's economy expected to expand by 7.37% in 2025, driven by heightened global demand for AI technology. Moreover, ongoing trade talks with the U.S. aiming to lower tariffs could further boost economic momentum. Meanwhile, Taiwan's commitment to maintain stable exchange rates reinforces confidence in the TWD's performance amidst these positive expectations.
Analysts suggest that the interplay of these factors will be crucial in determining the AUD to TWD exchange rate trajectory moving forward. Enhanced Australian performance in macroeconomic indicators may offset the robust growth seen in Taiwan, making this currency pair one to watch in the near term.
