TWD likely to continue to follow broader market tone but with lower volatility - ScotiaBank
Source: FxWire Pro - Commentary / 28 Dec 2017 09:33:48 Eastern Standard Time
In the past sessions, the Taiwanese dollar has appreciated with resilience even though foreign investors offloaded a total net USD 2.9 billion of local main board shares between 24 November and 27 December, noted Scotiabank in a research report.
This could be linked to a wide dollar weakness and local exporters’ dollar selloff nearing the year end. CBC Deputy Governor Yang Chin-long stated on Wednesday that the TWD appreciation reflects the weakness of the USD and is not huge compared to the EUR, KRW and CNY, when testifying before the legislative finance committee in Taipei. Also, he mentioned that there is continuity in Taiwan’s forex and monetary policies.
Taiwan’s top central banker Perng Fai-nan is set to step down on 25 February 2018. It implies that the Taiwanese dollar will likely continue to follow a broader market tone but with a relatively lower volatility, stated Scotiabank.
“USD/TWD is close to the “oversold” area according to the RSI index. However, the pair is expected to stay below the 30 resistance at the moment”, added Scotiabank.
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