USD/TWD Outlook:
Slightly positive, but likely to move sideways as USD is just above its recent average and trading near mid-range.
Key drivers:
- Rate gap: The Federal Reserve has paused interest rate cuts while Taiwan's Central Bank remains non-interventionist, maintaining a balance in USD and TWD influence.
- Risk/commodities: Ongoing geopolitical tensions and a "sell America" trend could limit the dollar's strength against the TWD, affecting investor confidence.
- One macro factor: Renewed optimism over U.S.-China trade discussions has prompted capital inflows into Taiwan, providing support for the TWD.
Range:
Expect the USD/TWD to hold steady within its established range, fluctuating but largely maintaining its current position.
What could change it:
- Upside risk: A stronger-than-expected U.S. jobs report could boost the dollar significantly.
- Downside risk: Continued geopolitical tensions leading to further selling of U.S. assets could weaken the dollar.