OCBC: Taiwan Dollar Weakness Flow-Driven, Policy Support in Place
OCBC analysts note the Taiwan Dollar remains under pressure above 32 per USD, driven by foreign equity outflows and dividend-related dollar demand rather than economic fundamentals, with policy support expected to limit further weakness.
OCBC Bank's Sim Moh Siong and Christopher Wong highlight that the Taiwan Dollar (TWD) is trading on the back foot, with USD/TWD holding above the 32 level. The weakness is primarily attributed to foreign equity selling and dividend/remittance-related demand for US dollars, rather than a deterioration in Taiwan's underlying economic fundamentals.
The analysts note that this flow-driven pressure may persist in the near term, but policy support from Taiwanese authorities is expected to act as a buffer against excessive depreciation. The pair's trajectory will depend on the pace of outflows and any official intervention signals.
Source: FXStreet Forex News