Analyst suggests Taiwan dollar probably won’t reach NT$28 against US dollar – Focus Taiwan

Taiwan Currency Update

Taipei, May 5th (CNA) – The Taiwanese dollar is not expected to rise to NT 28 against the US dollar, despite the recent drop of the US Dollar index (DXY) below 100, which has sparked concerns of a potential currency war.

Following President Donald Trump’s announcement of high tariffs on several countries, including Taiwan, on April 2, the DXY saw a quick decline—about 3% to 101.27—and then dipped below 100 as global markets reacted.

By the end of April, the Japanese yen had appreciated nearly 10% against the US dollar, with South Korea’s won increasing by 3.61% and the Taiwanese dollar by 2.39%.

A forex analyst who preferred to remain anonymous mentioned that Taiwan’s central bank has yet to receive any request from the US Treasury for an assessment of its currency as of May 1.

Market analysts suggest that a rise in the Taiwanese dollar is not currently anticipated.

It’s noted that Taiwan’s central bank is listed on the US Treasury’s “Watchlist” for interventions in its currency exchange rates. This list is established under the Omnibus Trade and Competitiveness Act of 1988, which assesses the foreign exchange practices of major US trading partners for any currency devaluation activities.

The US Treasury evaluates potential currency manipulation based on three criteria: a bilateral trade surplus with the US of at least $15 billion, a material current account surplus of at least 3% of GDP, and evidence of consistent unilateral foreign exchange interventions.

At present, Taiwan meets the first two criteria, meaning it is likely to remain on the watch list, according to officials from the central bank.

Analysts noted that the central bank will likely be cautious about intervening to stabilize the local currency exchange rates until they receive the Ministry of Finance’s report in the next six months.

Amid expectations of US pressure on currency valuation, the Taiwanese dollar has seen significant movement. On Monday morning, it was trading at $29.675 against the US dollar, up $1.389 from the previous close.

Last Friday, the dollar closed at NT$31.064, marking a rise of 0.953 (3.07%)—the highest since January 9, 2024, when it was at NT$31.023.

Trump may push for further evaluations of Taiwan’s currency, but analysts point out that his unpredictable nature leaves the foreign exchange market uncertain about the extent of any rise against the US dollar. However, many agree that “there’s no possibility of reaching NT$28.00” for the US currency.

Meanwhile, Chen Yu-Chung, a foreign exchange analyst at Taishin International Bank, remarked on Taiwan’s past experiences with hot money outflows due to the uncertainty of Trump’s tariff policies.

Although Trump announced a 90-day delay on his tariffs on April 9, trade tensions remain. The application of a 10% baseline tariff on most countries—excluding China—has contributed to the dollar’s decline, while Taiwanese stocks have rebounded with foreign investors increasingly making net purchases, thereby bolstering the Taiwanese dollar.