The current market bias for the AUD to TWD exchange rate is range-bound.
Key drivers include:
- Interest rates: The Reserve Bank of Australia is expected to raise rates in early 2026, which will likely strengthen the AUD compared to the TWD. In contrast, Taiwan's central bank is committed to maintaining exchange rate stability without manipulation, which can weigh on the TWD's movement.
- Commodity prices: An increase in commodity prices has recently supported the AUD, adding upward pressure against the TWD.
- Economic outlook: The anticipated rise in inflation in Australia suggests strong economic performance, potentially benefiting the AUD.
In the near term, the trading range is expected to remain stable, given that the AUD has recently climbed to 90-day highs near 21.09, which is significantly above its 3-month average.
An upside risk could be a strong rise in commodity demand that pushes the AUD higher, while a downside risk might stem from geopolitical tensions affecting risk sentiment, potentially leading to a drop in the AUD against the TWD.