March 15, 2023 03:21 GMT
USD/TWD Sitting Close To 200-Day MA On Conflicting Macro Drivers
(MNI Australia) USD/TWD spot is sub 30.60, slightly firmer in TWD for the session so far. The pair hasn't spent any time in March sub 30.50. We sit very close to the simple 200-day MA 30.59, while 100-day sits on the topside at 30.89. Also note a number of EMAs are also near by (100-day around 30.61, 20-day at 30.55 and 50-day at 30.54).
- The pair remains somewhat stuck between the improved equity market tone, with the Taiex tracking +1% higher today. This should help improve the equity flow backdrop. Yesterday saw just over $1bn in net equity outflows, the largest since Oct last year.
- Offsetting this to some degree is a firmer US-TW rate differential backdrop, last near +319bps, we sub +290bps earlier in the week in the 2yr space.
- Note the domestic data calendar is empty until the 20th, when export orders print.
- Geopolitics is likely to be the other focus point. Headlines crossing that a US Congressional delegation will visit Taiwan today and tomorrow.
- Earlier Honduras stated it would look to establish ties with China, which would end its relations with Taiwan.