Recent developments indicate a mixed outlook for the EUR to TWD exchange rate, driven by economic data and monetary policy expectations in both the Eurozone and Taiwan.
The euro recently experienced downward pressure following disappointing consumer confidence data from Germany, suggesting challenges in the Eurozone's largest economy. Analysts note that the euro often correlates negatively with a strengthening US dollar, further impacting its performance. However, next steps from the European Central Bank (ECB) will be crucial for the euro's trajectory. If recent ECB minutes reflect a hawkish stance, a rebound could be expected, potentially bolstering the euro's value.
Meanwhile, positive signs emerged from the Eurozone's economic activity, as evidenced by an increase in the HCOB Eurozone Purchasing Managers' Index. Additionally, eurozone inflation remains stable at 2%, in line with ECB targets. However, concerns about the euro's rapid appreciation—14% higher against the US dollar in 2025—are being voiced by ECB officials, as it may hurt export competitiveness.
On the other hand, the New Taiwan Dollar has appreciated significantly, surpassing 10% gains this year. Taiwan's central bank is implementing strict capital controls to manage this appreciation which threatens the export-driven economy. Fitch Ratings recently placed several Taiwanese insurers on downgrade watch due to financial stress linked to the TWD's strong performance.
Price data shows the EUR/TWD exchange rate at 35.63, approximately 3.4% above its three-month average, indicating a period of relative strength for the euro. Market observers note that EUR/TWD has traded in a stable range, further denting expectations of significant volatility in the near term.
Trends in the oil market also play a role; crude oil prices are currently around $68.62, just below the three-month average. Given that fluctuations in oil prices can have ripple effects across currencies, particularly for economies reliant on commodity imports, any significant changes could further impact the EUR/TWD outlook.
As the situation evolves, close monitoring of economic indicators, central bank policies, and geopolitical developments will be essential for understanding the direction of the EUR/TWD exchange rate.
