Taiwan Reserves Rise

USD/TWD is higher today, last trading at 29.951 off session lows at 27.932. Data yesterday showed Taiwan's foreign reserves rose to $541.11bn, up from $539.04bn in March. Reserves had declined approximately $3bn from February to March, after a consistent increase totaling $43bn since September. The central bank has been warned off intervention by the US Treasury who claim TWD could be up to 21% undervalued. USD/TWD declined around 2.2% during April and closed below 28.00 for the first time since 1997.

• Taiwan's chip making industry could be eroded by commitments from the US and Europe this week to reduce reliance on overseas suppliers such as South Korea and Taiwan. EU Industry Commissioner Breton said today "We want to come back to our former market share of production for the needs of our industry". The news comes as TSMC announce capex of around $130bn over the next four years to expand capacity.
• Markets await CPI data later in the session, headline Y/Y CPI is expected at 1.86% from 1.26% in March, while the core reading is expected at 1.15% from 1.07%