Recent developments in Taiwan's economy suggest a favorable outlook for the New Taiwan Dollar (TWD). Analysts have upgraded the GDP growth forecast for 2025 to 7.37%, positioning Taiwan for its most robust growth in 15 years, largely fueled by rapidly increasing global demand for artificial intelligence technology. This bullish economic sentiment may contribute to strengthening the TWD in the medium term.
Additionally, ongoing trade negotiations with the U.S. could play a significant role in TWD's valuation. Taiwan is pushing for a reduction in U.S. tariffs on its exports from 20% to 15%, which could enhance its trade competitiveness and bolster the economy further. Simultaneously, the Taiwanese government has committed to increasing defense spending by NT$1.25 trillion, primarily to enhance its self-defense capabilities against China. This dynamic may create fluctuations in investor sentiment but could also underpin the TWD as the government signals proactive measures to maintain stability.
Currency policy remains steadfast, with both the U.S. Treasury and Taiwan's central bank emphasizing their commitment to avoiding currency manipulation for trade advantages, aiming to stabilize exchange rates.
In recent trading levels, the TWD has faced downward pressure. The TWD to USD is currently trading at 0.031601, marking a 90-day low and 2.4% below its three-month average of 0.032379. Similarly, the TWD to EUR has also declined to 0.026911, down 3.3% from a three-month average of 0.027816. The TWD to GBP is at 0.023629, about 2.9% lower than its three-month average of 0.024341. Additionally, the TWD to JPY has hit 60-day lows at 4.9113, slightly below its three-month average of 4.9535.
In conclusion, while recent developments and forecasts are overall positive, highlighting economic growth and trade negotiations, the existing market conditions reflect a period of lower exchange rates against major currencies. For individuals and businesses involved in international transactions, monitoring these trends could provide opportunities to optimize their currency exchanges.
