Potential For Intervention

USD/TWD last at 27.987. Taiwan dollar has strengthened, the drop in the greenback allowing USD/TWD to drop below 28.00. Last week there was chatter of intervention by state banks at the behest of the CBC when the rate began to fall sharply. The CBC has said it only intervenes in extraordinary circumstances after the US Tsy stopped short of labelling Taiwan a currency manipulator but warned that heavy intervention much stop. TWD recorded its best week since December last week.

• Data on Friday showed industrial production rose 16.78% Y/Y, against an expected 9.7%. Manufacturing unsurprisingly led gains in the breakdown with global demand for chips still flying high. The breakdown of manufacturing output shows electronic parts rose 26.68%.
• Geopolitical tensions continue to simmer. China has sent more planes flying over Taiwan's ADIZ again over the weekend. While at a Council on Foreign Relations meeting hinese Foreign Minister Wang Yi said "playing the Taiwan card" is a dangerous game of "playing with fire". He warned that the US should not meddle, and that the Taiwan issue is a triggerpoint in Sino-US relations. While the Australian defence minister, Peter Dutton, has said a conflict involving China over Taiwan cannot be discounted but he insists the government's focus remains on having "good relations" with China.