Alongside broader Asia-Pac FX, TWD fell......>

TAIWAN: Alongside broader Asia-Pac FX, TWD fell again at the open to hit

multi-year lows of 31.73 against the USD. The weakness proved short-lived

however, as TWD recovered alongside its regional peers (most notably KRW) as the

PBoC managed the CNY higher. The (very) modest recovery in TWD also helped

regional equities find bottom. The TAIEX fell on the day, but rallied strongly

from the day's lows before the closing bell. This sentiment is reflected in

offshore USD/TWD trade in US hours, with 1m NDF outrights hugging the day's

lows.

-Domestic news remains mixed, with CPI figures falling below expectations,

countered by the country's cabinet keeping a balanced budget into 2020.

-USD/TWD options volume sits comfortably higher than recent averages for this

time of day, with USD/TWD upside protection in demand. Call strikes at 31.00,

31.50 and 32.00 have drawn the most interest.

-The spot rate may find some support on approach to the 31.452 level, marking

the 23.6% Fib for the 30.554 - 31.730 move. The Friday highs could also slow any

decline, sitting at 31.393.