USD/TWD: Pressure on Taiwan's export growth to dampen the TWD – MUFG


The TWD strengthened by around 0.4% against the US dollar in November. However, as Taiwan’s growth of export orders is set to decline, economists at MUFG Bank expect the USD/TWD pair to advance nicely through the next year.

Depreciation bias for TWD against USD till end of 2022

“For the medium term, we expect Taiwan’s exports growth to be on a trend decline till the end of 2022. Further decline in semi-conductor prices would add pressure on the nominal value of exports as well.” 

“China, one of Taiwan’s major exports destination, will experience a sizable GDP growth deceleration from this year’s around 8% YoY growth to about 5-5.5% YoY in 2022, which would imply a much weaker incremental demand for Taiwan goods in 2022.” 

“Other factors, including higher US rates, stronger Taiwan capital outflow as more of Taiwan’s insurance allocate to US assets, would also add pressure on TWD.”

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD falls below 1.1300 as dollar keeps its strength ahead of Fed

EUR/USD is trading in the negative territory below 1.1300 on Wednesday as markets wait for the FOMC to announce its policy decisions following its two-day meeting. The US Dollar Index holds above 96.00 ahead of the American session, supported by the modest recovery seen in US Treasury bond yields. 

EUR/USD News

GBP/USD holds above 1.3500 for now on improving sentiment

GBP/USD is posting modest daily gains above 1.3500, supported by the positive shift seen in market sentiment. The UK's FTSE 100 Index is rising more than 1.5% and S&P Futures are up 2.4% ahead of the Fed's policy announcements. 

GBP/USD News

Gold retreats below $1,840, markets gear up for Fed policy decisions

Gold spent the first part of the day moving sideways in a tight range below $1,850 but came under renewed bearish pressure during the American trading hours. With the dollar holding its ground ahead of Fed's policy announcements, XAU/USD trades below $1,840.

Gold News

Cryptos to enjoy 20% upswing

BTC generated a significant amount of buying during the early NY trading session, pushing higher by more than 5%. Likewise, ETH has rallied over 24% from the weekly lows. XRP continues to lag BTC and ETH in performance, but a rally of its own is likely to develop very soon.

Read more

Federal Reserve Interest Rate Decision Preview: Inflation, Omicron and equities Premium

Fed expected to reaffirm the March end of bond purchases, rate hike. Balance sheet disposition is of prime interest to markets. Equity declines reflect rising interest rates and economic concerns.

Read more

Forex MAJORS

Cryptocurrencies

Signatures