USD/TWD Extends Rebound On Weaker Equities/Softer Export Orders

Spot USD/TWD sits close to session highs, last near 31.20. This is around +0.40% above Thursday closing levels. We are above all key EMAs (the 20-day is the nearest around ~31.07). Early July highs sit around the 31.40 region, while mid-month lows come in around the 30.83 level. The 1 month NDF sits below spot, last at 31.125.

• TWD is seeing negative spill over from weaker TWSE levels, although the index has been steadily recovering from earlier lows (last -0.70%). TSMC was weaker after the company cut its revenue guidance and delayed a start to its US project.
• Still TWD is much weaker compared to equity strength seen in recent months, with a weaker CNY likely providing some offset to the equity impulse.
• So far this month, offshore investors have sold $1.5512bn of local shares, with -$260.5 in net outflows up to Thursday of this week. Net inflows for the year are still elevated at $9.7bn.
• An additional headwind for the local FX was a weaker than expected export orders print on Thursday. We came in at -24.9% y/y (-20.3% was the forecast). The trend has been around these levels for a number of months now. Weakness was fairly broad base by product segment and by geographical region. We did see y/y momentum soften to the US and EU.