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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
TWD
USD/TWD sits near 32.43, fresh lows in the pair back to the first half of July. The 1 month NDF sits near 32.07. Earlier we got close to 32.00, which was levels last seen in mid-May.
- This morning's low in the 1month NDF was very close to the 200-day EMA, see the chart below. A break sub this level could see mid May lows targeted. Early April lows were near 31.80. The 100-day is back above 32.31.
- The better equity tone over the past 24-48 hours, with tech indices bouncing strongly, has helped TWD. Today the Taiex is up over 3%, almost back to flat for the week after Monday's 8.35% fall.
- Still, month to date equity outflows remain large at -$4.8bn, while Taiwan related ETFs have also suffered outflow pressures. Some stabilization in such outflow pressures could aid further TWD gains.
- We noted back at the start of the month that USD/TWD could play some catch up to the downside in line with other North Asia FX gains.
- This, along with very depressed TWD NEER levels may have generated some support for TWD in recent sessions. Part of Citi's recent long TWD/THB recommendation reflected this.
Fig 1: USD/TWD 1 Month NDF Versus Key EMAs
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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