USD/TWD Pushing Towards 33.00, Ami Further Equity Losses, Export Orders Due Later

USD/TWD continues to push higher. In spot markets the pair is at 32.85, fresh highs back to early 2016. The next logical target is 33.00 in the pair. Note early 2016 highs came in around 33.80 for the pair. Spot TWD is 0.35% weaker so far today. The 20-day EMA sits on the downside, back at 32.58. The 1 month NDF is around the same level off 0.25% so far today. The TWD is the weakest performer in EM Asia FX so far today.

• Familiar factors are in play for TWD weakness. The onshore equity market correction continues, with the Taiex off more than 2.3%, although we are away from session lows. Offshore investors sold $5.4bn of local shares last week, which was the second largest weekly outflow for 2024.
• Tech trade restrictions/potential US geopolitical shifts remain key concerns for local equities.
• Spillover from weaker yuan levels is also likely evident, although yuan losses are modest at this stage, following the surprise reverse repo and LPR cuts earlier.
• On the data front we have June export orders later. The market expects +12.3%y/y, versus 7.0% prior. Also out is the June unemployment rate. The government also announced earlier that government workers would be awarded a 3% pay rise in 2025 (per BBG).