USD/TWD Outlook:
The USD/TWD exchange rate is slightly weaker but likely to move sideways as it trades just below its 3-month average and remains within a stable range.
Key drivers:
• Rate gap: The Federal Reserve's recent interest rate hikes have strengthened the USD compared to Taiwan's stable policy at 2.00%.
• Risk/commodities: Safe-haven demand for the USD is bolstered by ongoing geopolitical tensions.
• One macro factor: Taiwan's resilient export performance in 2025, particularly in technology sectors, has helped support the TWD.
Range:
Expect the USD/TWD to hold in its recent range of 31.09 to 31.68, maintaining stability below the 3-month average.
What could change it:
• Upside risk: A significant rise in US economic indicators could further propel the dollar.
• Downside risk: Improved economic data from Taiwan may strengthen the TWD and decrease the USD's value.