The Taiwan dollar surged to its highest level in nearly three years on Monday, as the US dollar weakened against most Asian currencies. The Taiwan dollar rose 5.1% to 29.162 against the US dollar, amid growing confidence in the stability of Taiwan's economy.
The sharp rise came despite no intervention from Taiwan's monetary authority, which usually acts when there are significant movements in the foreign exchange rate. Analysts said a lack of buyers for the US dollars that Taiwanese exporters and insurers want to sell also contributed to the surge.
At the same time, the Taiwanese government is reportedly holding talks with the United States to avoid Washington's implementation of "reciprocal" tariffs. Previously, President Donald Trump announced a 32% tariff on Taiwan, but the decision was postponed for 90 days.
There was also speculation that the US may press several Asian countries to strengthen their currencies to reduce their trade deficits. In this situation, Taiwan is seen as one of the countries that may “allow” a tacit strengthening of the currency, due to political and trade pressure from Washington.
The surge in sentiment towards Taiwan is also influenced by positive signals in US-China trade relations, as Taiwan’s economy is highly dependent on both countries. Meanwhile, global investors are now awaiting the US Federal Reserve’s monetary policy decision this week, which is expected to keep interest rates on hold, despite Trump’s continued push for lower borrowing costs.
