Forecasts for USD to TWD
The USD to TWD exchange rate has recently faced downward pressure, with analysts attributing this trend to escalating trade tensions between the United States and China. The introduction of significant tariffs, such as an 84% tariff imposed by Beijing on U.S. goods, has raised concerns about a potential recession in the U.S. This intensified tariff war is believed to be weakening the U.S. dollar (USD), causing investors to reconsider their positions.
Recent market updates reveal that the USD is trading at 90-day lows around 32.37 TWD, roughly 1.6% beneath its 3-month average of 32.88 TWD. The exchange rate has remained surprisingly stable within a range of 2.8% from 32.37 to 33.27, indicating a period of consolidation despite external pressures.
The outlook for the USD could shift depending on upcoming economic data, particularly the U.S. consumer price index. If inflation appears to cool, it may increase the likelihood of a Federal Reserve interest rate cut in the near term. Lower interest rates could traditionally weaken the dollar; however, the prospect of easing monetary policy might also allay recession fears, potentially giving the USD some support.
Forecasters caution that the impacts of U.S. tariffs on Taiwan, which reflect a reciprocal rate of 32%, alongside worries about geopolitical tensions related to China, may hinder the Taiwanese dollar (TWD). Taiwan's technology sector, a crucial pillar of its economy, may also be adversely affected by a global tech slowdown, adding further uncertainty to TWD's performance.
Experts suggest that the combination of U.S. fiscal policies, inflation trends, and geopolitical stability will be critical in determining the future course of the USD to TWD exchange rate. While the USD retains its status as the world's leading reserve currency, the current climate invites speculation about its durability amidst intentional weakening strategies and trade conflicts.
