The Taiwan dollar jumped 4.5% on Monday to the highest in over two years, amid ongoing trade negotiations with the US.The island’s currency surged to 29.672 versus the greenback Monday morning, the strongest level since February 2023, gaining for a sixth straight session. The rise was the biggest since 1988. The benchmark stock index fell as much as 1.7%.
“The move is likely on the back of local US dollar rebalancing in anticipation of trade deals with the US, which would take some pressure off Asian currencies,” said Namik Immelbäck of Skandinaviska Enskilda Banken AB. “Certainly, there will be a degree of short speculative positions that have been covered in a hurry.”
Taiwan’s monetary authority is traditionally expected to smooth out sharp currency moves —particularly when the Taiwan dollar strengthens — in order to maintain market order and support the island’s export-driven economy. However, there appeared to be no active central bank intervention to slow the rally this time.The currency’s move also comes as Taiwan negotiates with President Trump’s administration on a tariff deal, like many other Asian economies. On Saturday, the government said it had conducted first-round talks with the US, without revealing further details.
“The move is likely on the back of local US dollar rebalancing in anticipation of trade deals with the US, which would take some pressure off Asian currencies,” said Namik Immelbäck of Skandinaviska Enskilda Banken AB. “Certainly, there will be a degree of short speculative positions that have been covered in a hurry.”
Taiwan’s monetary authority is traditionally expected to smooth out sharp currency moves —particularly when the Taiwan dollar strengthens — in order to maintain market order and support the island’s export-driven economy. However, there appeared to be no active central bank intervention to slow the rally this time.The currency’s move also comes as Taiwan negotiates with President Trump’s administration on a tariff deal, like many other Asian economies. On Saturday, the government said it had conducted first-round talks with the US, without revealing further details.
Global funds bought $1.2 billion of Taiwanese shares on a net basis on Friday, the biggest inflow in almost a month. It also marked their third-highest purchase this year. The benchmark TWSE Index surged 2.7% to a one-month high.
