Stronger After Equity Inflows

Taiwan dollar is holding gains made in Monday's session, USD/TWD last down 0.003 at 27.921 – the lowest since a brief trip down to 27.87 on July 15. The gains yesterday were attributed to equity inflows with the Taiex gaining around 1.5% post strong GDP figures, while the announcement that some coronavirus restrictions would be removed in Taipei provided another tailwind.

• There were 14 new cases on Monday, but Health Minister Chen warned that although the local COVID-19 outbreak has been relatively well controlled since the government lowered the nationwide Level 3 COVID-19 alert to Level 2 from July 27 to Aug. 9, there is little possibility of further easing. While no additional measures are expected, current restrictions will likely be extended.
• Markets now look ahead to CPI data later this week, and export data early next week which is expected to post another strong performance as a core driver of the recovery.