TWD VIEW: Thursday saw ING note that..........>

FOREX: TWD VIEW: Thursday saw ING note that "Taiwan's central bank decided to

put a rate cut on hold. The consensus was for a cut to 1.00%. The decision came

despite a continued rise in unemployment & the econ being in deflation since

Feb. Industrial prod. in Apr was +ve Y/Y, -ve M/M. Export orders also showed a

contraction M/M in Apr. Consumption data, meanwhile, showed that domestic demand

has been affected by uncertainty in the job market. Exports & imports fell Y/Y

in May. These numbers make it all the more surprising that the central bank

decided to stay on hold. It is likely that the central bank is trying to buy

some time in the hope that the economy, especially the export sector, will

recover very soon. This is not impossible given that Taiwan's semiconductor

industry has successfully filled the gap left by U.S. tech. Taiwan's central

bank could still cut rates to 1.00% at the next policy meeting on 17 Sep. We

exp. TWD to gradually strengthen vs. USD given the central bank's latest

decision. We expect vol. when the next round of export data is released, as this

could be worse than exp. USD/TWD call revised to 29.63, 29.65 & 29.60 for the

end of 2Q20, 3Q20 & 4Q20, respectively."