The New Taiwan dollar yesterday extended its losing streak to a fifth straight session, closing at NT$29.719 against the US dollar, down NT$0.13 from the previous day, as broad US dollar strength and lingering trade uncertainties weighed on non-US dollar currencies, traders said.
The NT dollar depreciated NT$0.357, or 1.21 percent, against the greenback over the past five trading days, central bank data showed.
Turnover at Taipei Forex Inc fell to US$878 million, reflecting subdued investor activity as markets await Washington’s tariff rate on Taiwan.
Photo: CNA
“The US dollar index has shown significant strength in recent sessions, putting pressure on non-dollar currencies,” a Taipei-based currency trader said. “With Taiwan’s tariff arrangement [with the US] still unresolved, many investors prefer to stay on the sidelines.”
Washington has concluded trade agreements with economies including the EU, Japan, Vietnam and Indonesia, featuring lower-than-expected tariff rates — moves that have helped stabilize global trade sentiment and supported the greenback, the trader added.
The shift marks a twist in Washington’s trade posture. Initially viewed as confrontational, recent actions suggest a more measured and pragmatic strategy, the trader said.
The extension of the US-China trade truce beyond its Aug. 12 deadline — following inconclusive talks in Stockholm on Tuesday — further signals Washington’s intent to avoid immediate escalation and buy time for further negotiations, they said.
However, the outcome of Taiwan’s own discussions with the US remains unclear, keeping investors cautious.
“If the US sets the tariff rate above 20 percent for Taiwan, the NT dollar could face further downside risks,” another trader said. “A lower-than-expected rate, on the other hand, could ease pressure and allow for a modest rebound.”
In the meantime, the central bank has allowed the NT dollar to move in line with broader market forces under its “willow theory” approach to exchange rate management, a third trader said.
First articulated by then-central bank governor Perng Fai-nan (彭淮南) in 2005 and upheld by central bank Governor Yang Chin-long (楊金龍), the strategy favors flexibility and selective intervention — guiding the currency like a willow bending with the wind — rather than defending a fixed level.
A weaker NT dollar should offer local exporters some relief, easing concerns over eroding competitiveness and mitigating foreign exchange losses, the third trader said.
Meanwhile, attention is turning to global monetary policy.
The US Federal Reserve and the Bank of Japan are scheduled to hold policy meetings this week, with markets broadly expecting both to leave interest rates unchanged as they gauge the effects of new US tariffs.
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
RATIONING: The proposal would give the Trump administration ample leverage to negotiate investments in the US as it decides how many chips to give each country US officials are debating a new regulatory framework for exporting artificial intelligence (AI) chips and are considering requiring foreign nations to invest in US AI data centers or security guarantees as a condition for granting exports of 200,000 chips or more, according to a document seen by Reuters. The rules are not yet final and could change. They would be the first attempt to regulate the flow of AI chips to US allies and partners since US President Donald Trump’s administration said it rescinded its predecessor’s so-called AI diffusion rules. Those rules sought to keep a significant amount of AI
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
RSS