USD/TWD Off Recent Highs, As Firmer CNY & Local Equity Rebound Help

(MNI Australia) USD/TWD has moved away from recent highs. The pair last near 31.92, against earlier highs in the week near 32.07. This puts us very close to the 20-day EMA, around 31.90. We haven't breached this support point in any meaningful way since mid July. The 50-day EMA sits further south around 31.65.

• TWD is benefiting from the pull back in USD/CNY, although this pair is up from session lows.
• The local equity back drop is also on the improve, the Taiex +1.0% firmer in the first part of trade today.
• This may help stabilize equity outflows, which are nearly $2bn in September to date, although this week has seen some slowing in the pace of outflows (-$313.4mn).
• The local data calendar remains quiet until next Wednesday when August export orders print.
• There is also likely to be some focus on China's proposal to make the Fujian Province a demonstration zone for development across the Strait with Taiwan. A press conference by the State Council Information Office is expected to be held today following the announcement earlier in the week (see this link).