Strong Data Fails To Push Below 28 Handle

USD/TWD is slightly higher than the open, last trading at 28.011. After market on Friday GDP figures were released. The Taiwanese economy grew at 4.94% in December, well above forecasts. The print means that 2020 growth printed 2.98%, the fastest in a decade. This means Taiwan is one of the few countries to exceed 2019 growth (at 2.96%), and even managed to outpace China. The government attributed the growth to surging exports especially of electronics, driven by new technologies such as 5G and by people working from home globally due to the pandemic. Final figures will be released on Feb 20.

• Data released earlier in the session showed Taiwan's manufacturing sector continued to expand at the start of 2021. The headline index at 60.2 is a bumper print and is supported by a strong set of subcomponents. Firms signalled further substantial increases in output and new orders. Rising customer demand and greater optimism towards the year ahead drove a steeper increase in employment.
• Annabel Fiddes, Associate Director at IHS Markit, said: "The latest PMI data showed that Taiwan's manufacturing sector continued to expand sharply at the start of 2021. Notably, growth momentum remained at a near-decade high, with firms pointing to substantial increases in both output and sales."
• Implied 1-month volatility has risen slightly, but sits near recent lows at 4.05 as the central bank continues to push back against a close below 28.00. The previous close of 28.008 was the closest the pair has come.
• Markets look ahead to CPI figures due on Friday 5 February.