Taiwan Expected To Be Named FX Manipulator

In a development that could stoke tensions, Ex-U.S. Senator Christopher Dodd and two former deputy secretaries of state, Richard Armitage and James Steinberg, will meet with Taiwan President Tsai Ing-wen during a visit April 14-16 according to United Daily News. In response, Chinese officials said the US visit will only add to cross-Strait tensions, and added China is opposed to any official US-Taiwan exchanges.

• Elsewhere, there is a TD Securities report doing the rounds that posits the U.S. is likely to name Taiwan as currency manipulators as the two nations are in breach of all the three criteria set by the Treasury. Taiwan were put on the watchlist previously, the central bank said it was unconcerned about this and blamed competitive exports, but since the potential designation USD/TWD has moved higher and there has been less evidence of central bank smoothing. Since March 14 USD/TWD 1-month implied volatility has fallen 165bps to 4.2075%, the lowest level since February 23.