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TWD Following Local Equities Higher, 1 Month NDF Eyeing 30.00 Test

TWD

Spot USD/TWD has gapped lower in the first day of trading since 19th of Jan. We hit a low of 30.13, but now sit slightly higher near 30.17. Still, this is +0.65% firmer in TWD terms since the last close. This is lows back to mid-August last year. The 200-day EMA comes in at 30.37. The 1 month NDF sits at 30.02. In this space we haven't been to sustain breaks sub 30.00 in recent months.

  • TWD continues to follow the improved equity tone, see the chart below. The Taiex is up around 3% so far today, playing catch up to the improved mood global equities, particularly the tech space since markets were last open.
  • Local equities are now more than 20% above late Oct 2022 lows, while offshore investors have added $4.5bn to local shares since the start of the year (up to Jan 17), but it is likely further inflows will happen today.
  • Elsewhere, China has stated that it will resume imports of some Taiwan food products (see this link for more details) in a sign of some thawing of tensions.
  • On the data front, tomorrow delivers export orders for Dec (-25% y/y forecast, -23.4% prior).
Fig 1: TWD Versus Taiex

Source: MNI - Market News/Bloomberg

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