Affected by the weakness of the US dollar, Asian currencies are collectively appreciating, prompting central bank interventions. The USD to TWD (USDTWD) fell sharply last Friday from above 32, hitting a low of 30.77. Although the central bank boosted it to 31.064 at the close, it broke below the 30 barrier immediately at today's opening. The New Taiwan Dollar has appreciated over 3% for two consecutive days.

Asian currencies are surging, and Hong Kong authorities are intervening.

According to Bloomberg reports, the Hong Kong Monetary Authority sold a record amount of Hong Kong dollars (HKD) last Friday to prevent its appreciation and maintain the Linked Exchange Rate System that has been in place for 42 years. The offshore RMB exchange rate rose to its highest level since November. The New Taiwan Dollar (TWD) has also surged for two consecutive days, breaking above the 30 barrier this morning.

This volatility indicates that as President Trump’s ever-changing tariff policies intensify concerns about a US economic recession, the outflow of the global reserve currency may have a ripple effect on financial markets. Last week, speculative traders exhibited a stronger bearish sentiment towards the US dollar than at any time since September last year, indicating that investors are increasingly unwilling to hold US assets.

In the wave of 'selling US assets', Asian currencies, including the yen and the RMB, are benefiting from repatriation purchases and alternative investments. Although it seems that both Beijing and Washington are softening their stance on the trade war, this strategy appears unchanged, with Beijing stating that it is assessing the possibility of negotiating with the US.

The strengthening of emerging market currencies helps attract foreign capital inflows and lowers import prices, but it may also weaken their competitiveness in the global market, thereby harming exporters' interests.

The USD to TWD broke below the 30 barrier.

The USD to TWD (USDTWD) fell sharply last Friday from above 32, hitting a low of 30.77. Although the central bank boosted it to 31.064 at the close, it broke below the 30 barrier immediately at today's opening. The New Taiwan Dollar has appreciated over 3% for two consecutive days.

(TWD surges by seven jiao, Taiwan's central bank clarifies: There is no pressure from the US for TWD appreciation)

During a questioning session in the Legislative Yuan, Premier Su Tseng-chang emphasized that the New Taiwan Dollar is not under any pressure to appreciate. This trend reflects that countries are still adjusting to tariff trade policies. The government has also proposed industry support plans, hoping to assist industries in weathering the impact from all aspects. The current situation has not yet reached an 'uncontrollable' state, and they will continue to monitor subsequent developments.

The central bank once again issued a statement indicating that last Friday the TWD exchange rate was influenced by psychological expectations. The Taipei stock market rose 4.63% due to TSMC, leading electronic and financial heavyweight stocks to rise together. Foreign capital significantly bought a net 42.9 billion NTD and entered funds, prompting the appreciation of the TWD. The central bank has acted in a timely manner based on its responsibilities.

However, according to foreign exchange traders, recent selling of the US dollar by investors triggered a wave of short-selling sentiment. The Taiwanese central bank, which usually intervenes to prevent depreciation but not appreciation, did not intervene during the trading day, only making slight moves before lunch and at the close, seemingly welcoming this wave of TWD appreciation! Moreover, there were no buying pressures for the US dollar below, suggesting that the current appreciation of the TWD may have no limits.

This article discusses the surge of Asian currencies, with the New Taiwan Dollar surprisingly reaching the 29 level. Is the central bank intervening? First appeared in Chain News ABMedia.