TWD: Spot USD/TWD Edges Lower, Eyeing 30.00 Test
Spot USD/TWD is drifting lower in the first part of Friday trade. We were last near 30.11, up around 0.20% in TWD terms versus end Thursday levels. Broader USD sentiment is softer, with the majors higher against the USD led by JPY, although gains aren't large at this stage. Other USD/Asia pairs are mostly lower, albeit to varying degrees. USD sentiment has struggled in the wake of softer US data outcomes, but the BBDXY index remains comfortably above recent lows.
- For spot USD/TWD little has changed from a technical standpoint, with downside focus likely to remain on a re-test of the 30.00 level. The RSI (14) is still oversold (last 16.8), but away from earlier May extremes. Any renewed upside could see 30.45/50 targeted, which capped out the pair at the start of this week.
- The pace of gains for onshore equities has slowed in recent sessions, while offshore investors continue to buy local stocks, but also at a slower pace. Yesterday's $124.3mn in net inflows bought May to date inflows to over $6.8bn. The chart below plots these rolling monthly inflows, (inverted on the chart) against spot USD/TWD. If sustained this would be the best month for equity inflows since Nov 2023.
- On the data front, we have April export orders out next Tuesday.
Fig 1: Spot USD/TWD Versus Monthly Equity Inflows (Inverted)
Source: MNI - Market News/Bloomberg
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