EUR/TWD Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average, yet lacks a clear driver.
Key drivers:
• The European Central Bank has adopted a cautious monetary policy stance, keeping interest rates steady despite recent modest economic growth in the Eurozone, which supports the euro's relative strength.
• Oil prices have surged significantly, leading to increased demand for the US dollar; a stronger dollar typically pressures the euro, adding uncertainty to this pairing.
• Taiwan's recent trade agreement with the US is expected to enhance the TWD's stability but may also increase demand for US dollars, impacting the TWD’s value further.
Range: The EUR/TWD is likely to hold within its recent range, as external influences create fluctuations but no decisive moves.
What could change it:
• Upside risk would arise if positive economic data from the Eurozone leads to a shift in ECB policy.
• Downside risk could occur if US dollar strength grows significantly due to persistent oil price increases and geopolitical tensions.
