The USD to TWD exchange rate has recently been influenced by a combination of U.S. economic indicators and developments in Taiwan’s economic landscape. Currently, the USD is trading near a 90-day high of 30.79, which is 1.6% above its three-month average of 30.3. The trading has remained relatively stable within a 4.7% range of 29.41 to 30.79.
Recent forecasts emphasize the importance of upcoming U.S. inflation data, specifically the Consumer Price Index (CPI) report. Analysts suggest that if inflation accelerates as expected, it could support the USD's position by tempering speculation about interest rate cuts by the Federal Reserve. Conversely, a softer inflation print could exert downward pressure on the USD. Additionally, ongoing U.S.-China trade tensions and mounting global dedollarization efforts further complicate the USD's trajectory.
Conversely, the New Taiwan Dollar (TWD) has shown strength, recently appreciating significantly against the USD largely due to robust export performance, particularly in the tech sector, including AI-related semiconductors. The Taiwan central bank's decision to maintain a benchmark interest rate of 2% while raising the economic growth forecast for 2025 to 4.55% indicates confidence in the domestic economy. However, concerns linger among exporters regarding the TWD's strength affecting competitiveness.
Overall, analysts suggest that the outlook for the USD to TWD rate will continue to be shaped by these macroeconomic factors. Market participants should stay vigilant regarding the inflation data release from the U.S. and the economic developments in Taiwan, as these will be critical in determining the exchange rate's direction in the coming weeks.
