The New Taiwan Dollar (TWD) has seen considerable volatility recently, influenced by a mix of central bank policies, international trade dynamics, and market sentiment. Analysts note that the TWD's performance has been markedly affected by capital outflows, which drove the currency to a three-month low in August 2025. This depreciation coincides with a strengthening U.S. dollar, impacting the broader economic landscape for Taiwan.
Despite these challenges, there were points of resilience earlier in the summer when the TWD reached its highest value in three years in June 2025, bolstered by robust export growth and proactive measures taken by Taiwanese life insurers to mitigate currency risks. However, the positive outlook has soured somewhat, with Fitch Ratings placing several life insurers on a "Negative Watch" list due to financial pressures stemming from the TWD's appreciation.
Currently, the TWD to USD is at a 14-day high of approximately 0.032952, yet still 2.0% lower than its three-month average. The TWD against the Euro (EUR) and the British pound (GBP) also reflects a similar trend, with the recent price markers at 0.028004 and 0.024318 respectively, both showing slight declines below their three-month averages. The TWD to Japanese yen (JPY) follows suit, at 4.8583, just 1.5% below its average.
The intervention strategies outlined by Taiwan's central bank indicate a readiness to stabilize the TWD and manage market fluctuations. As U.S. tariffs continue to weigh on Taiwan's economic outlook, experts suggest that these factors will remain critical in influencing the TWD's trajectory in the coming months. Businesses and individuals involved in international trade should monitor these developments closely, considering potential currency risks as they engage in transactions.
