Despite a modest return of stability to......>

TAIWAN: Despite a modest return of stability to Chinese FX markets Monday, TWD

didn't follow suit, with USD/TWD closing at the highest level since January 23rd

2017. The moves follow exchange data showing foreign capital continues to be

withdrawn from domestic equities, with foreign funds being a net seller of

Taiwanese stocks for a ninth consecutive session - the longest streak of the

year so far. The move's done little to redress the balance in TWD/KRW, however,

with the cross still sitting well within range of recent cycle highs of 38.2906

(highest since mid-2013).

-TWD's persistent weakness prompted USD/TWD to hit the highest level since early

2017 Monday, with markets already hedging for further weakness. Close to $2.50

have been bought in USD/TWD call options for every $1 in puts so far today. Call

strikes at 31.90 and 32.10 have been particularly popular, levels that spot

hasn't traded at since the early months of 2017.