The recent performance of the euro (EUR) against the New Taiwan Dollar (TWD) reflects broader economic factors and geopolitical concerns. Analysts highlighted that the euro initially gained strength due to the weakening US dollar but faced headwinds from ongoing geopolitical tensions in Europe, particularly related to the Ukraine conflict. This backdrop, coupled with expectations for a slowdown in German factory orders, suggests that the EUR may continue to experience volatility in the near term.
Recent inflation developments in the Eurozone indicate that inflation has recently ticked up to 2.2%, surpassing the European Central Bank's (ECB) target, with policymakers expressing mixed sentiments regarding future inflation stability. As the ECB maintains a watchful eye on these inflationary pressures, any significant policy adjustments in response could significantly shape the euro's trajectory. Experts speculate that interest rate stability may support the euro versus other currencies, including the TWD, but the rising inflation could ignite concerns about economic growth, which might counterbalance any potential gains.
On the TWD front, Taiwan's economic outlook appears optimistic with growth expectations rising to 7.37% for 2025, primarily driven by increased global demand for AI technology. Such economic acceleration may lend strength to the TWD, especially as Taiwan seeks reductions in U.S. tariffs to boost exports. Furthermore, Taiwan's commitment to stabilizing currency values, in accordance with U.S. Treasury guidelines against manipulation, may bolster investor confidence in the TWD.
The EUR/TWD exchange rate recently reached 90-day highs near 36.54, which is 2.1% above its three-month average of 35.8. This indicates a strong upward trend in the euro's value against the TWD, although the currency pair has exhibited a stable trading range, suggesting that significant fluctuations should be monitored carefully.
In terms of oil prices, the recent surge near $63.37, despite remaining below its three-month average, reflects ongoing volatility in global markets. Given that oil price movements can impact exchange rates, particularly for currencies heavily tied to energy exports or imports, these trends could have an indirect effect on the euro’s stability against the TWD. A sustained increase in oil prices might add inflationary pressures for the Eurozone, influencing future ECB policies and, in turn, the EUR's performance.
Overall, as geopolitical tensions persist and economic indicators fluctuate, both the euro and the TWD's outlook will hinge significantly on regional developments, inflation trends, and global market responses. Stakeholders should remain alert to these evolving factors when considering transactions involving these currencies.
