Recent forecasts and updates indicate a relatively stable outlook for the USD to TWD exchange rate, currently hovering around 29.92, which marks a 30-day high. This level is approximately 0.7% above its three-month average of 29.7. Over the past three months, the USD to TWD rate has traded within a stable range of 28.93 to 30.72.
Analysts have pointed to the strength of the US dollar as a significant factor influencing this exchange rate. Recent economic data, particularly a surprise uptick in the US core PCE price index, has reinforced the dollar's stability. The Federal Reserve's interest rate policies remain crucial, as higher rates tend to support the dollar by attracting foreign investment. However, any hints of a cooling US labor market, particularly from anticipated non-farm payroll figures, could instigate speculation for a rate cut that might reverse some of the dollar's gains.
On the other hand, the Taiwan Dollar (TWD) faces pressures from external sources, particularly the ongoing U.S.-China trade tensions, including the imposition of a reciprocal tariff on Taiwanese goods. This can exert downward pressure on the TWD, especially in light of a potential global tech slowdown, as Taiwan's economy is heavily reliant on its technology and semiconductor sectors. Additionally, geopolitical tensions concerning Taiwan's relationship with China could create further uncertainty for the TWD.
Forecasters maintain that while the US dollar may remain strong in the near term due to robust economic indicators, any shifts in the geopolitical landscape or significant economic disruption could impact the dollar's value and, consequently, the USD to TWD exchange rate. Investors should stay attentive to these developments, especially as they look to navigate international transactions effectively.