Taiex Lower Again After Surge On Tuesday

Taiwan dollar is stronger today, gaining despite a small rebound in the greenback as the rate plays catch up with USDs decline on Tuesday. USD/TWD last down 0.056 at 27.882, the pair dropped back below the psychological 28.00 handle early in yesterday's session and has continued to move lower. TWD is now on track for the second straight day of gains after six consecutive sessions of decline.

• The Taiex is under some pressure, down around 0.6% but off worst levels. The index rose 5.16% yesterday after dropping 3% on Monday. Chip makers were the drivers of gains yesterday, the government has pledged to keep chip output high despite battling the latest surge in COVID-19 cases. National Development Council Minister King said earlier that if the outbreak can be contained by the end of June GDP could only be cut by 0.16ppts. He asserted that even if the outbreak extends into Q3, GDP should be over 5%
• On the coronavirus front Taiwan recorded 240 new local cases on Tuesday, down from 333 on Monday. Officials have said that testing stations set up earlier this month have helped keep numbers down while enhanced restrictions should also help contain the outbreak. The vaccination programme could accelerate soon, officials have said that wo experimental vaccines developed by Taiwanese companies - Medigen Vaccine Biologics and United Biomedical - were at the end of phase 2 trials, and hopefully would be available for locals in July after getting emergency use authorisation next month. Vaccines ordered from overseas are expected to start arriving next month.