In recent weeks, the EUR to TWD exchange rate has been influenced by several significant factors affecting both the euro and the Taiwan dollar (TWD). Analysts note that the euro has been under pressure due to its correlation with a strengthening US dollar. Recent economic data, including the Eurozone’s final services PMI, showed only slight improvements, leaving the euro vulnerable, especially as forecasts suggest declines in German factory orders and the Eurozone's Producer Price Index (PPI).
The outlook for the euro is further complicated by concerns over inflation and economic growth within the Eurozone. Inflation rates remain elevated, prompting speculation on the European Central Bank (ECB)'s potential pause in interest rate hikes. Such a pause could hinder the euro's recovery, especially against the backdrop of slowing GDP growth and ongoing geopolitical tensions affecting trade relations.
The volatility of the EUR to TWD exchange rate, currently at 34.05, reflects a significant 2.4% drop from its three-month average of 34.88, trading within a range of 33.02 to 37.37. This fluctuation highlights the impacts of broader market sentiment and the euro's susceptibility to external pressures, including energy prices, which have been somewhat stabilized but recently saw oil prices trade above their three-month average.
In contrast, the TWD faces challenges stemming from the US-imposed tariffs and the potential fallout from geopolitical tensions with China. Taiwan's key technology sector may also be affected by a global tech slowdown, which could weigh on the TWD.
Looking ahead, analysts emphasize that the euro's trajectory will heavily depend on the ECB's monetary policy, energy market dynamics, and political stability within the Eurozone. For the TWD, maintaining economic resilience against external trade pressures will be crucial. Given the complexity of these factors, businesses and individuals engaged in international transactions should closely monitor these developments to navigate potential currency fluctuations effectively.