July 25, 2022 02:58 GMT
The Taiwan dollar looks through press reports highlighting an escalation in Sino-U.S. tensions over the self-governed island.
- Spot USD/TWD trades flat at TWD29.926, as its recent ascent has stalled ahead of the TWD30.000 mark. A breach of that level would signal that bulls are back in the driving seat, with focus on TWD30.116, the 61.8% recovery of the 2019 - 2021 slide. Bears look for a fall through Jun 27 low of TWD29.594.
- USD/TWD 1-month NDF last +0.015 at TWD29.822. Topside focus falls on TWD30.000, which capped gains on Jul 14. Bears look for losses towards Jun 27 low of TWD29.423.
- The FT reported that "China has issued stark private warnings to the Biden administration about the upcoming trip to Taiwan by Nancy Pelosi," which were "significantly stronger than the threats that Beijing has made in the past." Senior U.S. security officials are known to be opposing the trip amid concerns that it could aggravate tensions with Beijing.
- Meanwhile, the Central News Agency said that a PLA reconnaissance ship sailed off the coast of Hualien ahead of Taiwan's annual military drill starting in that area today.
- Elsewhere, the Commercial Times reported that Taiwan's Cabinet will discuss the budget plan on Tuesday, with spending expected to rise to a record high of TWD2.5tn-2.6tn in 2023 from TWD2.25tn this year.
- The local data docket features industrial output (today), the National Development Council's Monitoring Indicator (Wednesday) & GDP (Friday).
- Factory production is expected to have slowed to +2.00% Y/Y in June from +4.48% prior, according to a Bloomberg survey.