27.50 Level In Sight

Taiwan dollar is stronger again, extending its rally to the sixth straight session, USD/TWD last down 0.080 at 27.607, the pair is approaching its 2021 lows of 27.50 where the CBC are expected to draw a line in the sand, the level was defended in June by the CBC who remain on the US Treasury's currency manipulator watchlist. The strength is attributed in part to inflows to domestic equity markets, on Friday foreign investors bought $1.159bn of Taiwanese stocks and bought a total $3.269bn over the course of last week.

• Geopolitical tensions with China simmer, 19 Chinese military aircraft were detected in Taiwan's air defense identification zone on Sunday. Taiwanese defence forces issued radio warnings and deployed air defense missile systems to monitor the activity. Last week Taiwan warned that China could "paralyse" its defenses in a conflict, a stark new assessment expected to fuel calls in the US for additional support.