Forex
Home›Forex›EM Currencies›Taiwan dollar’s August rally faces headwinds as inflow…
Taiwan dollar’s August rally faces headwinds as inflows fade
Foreign equity inflows slowed to about $861 million last week from $6.5 billion the prior week, undercutting momentum behind the currency’s best month since May 2025.
Taiwan’s dollar is giving up some of its August momentum, with analysts warning that the currency’s strongest monthly rise in more than a year is becoming fragile as several headwinds mount, according to LiveMint Markets citing Bloomberg.
The report points to a drop in foreign equity inflows, forwards market signals that underlying demand has softened, and technical resistance levels that are causing some analysts to reassess further gains. It noted that foreign equity inflow momentum faded after mid-August buying, and that exporter activity does not appear to be positioning for a sustained Taiwan dollar rally.
The Taiwan dollar closed at 31.848 per US dollar on Friday. Analysts cited 31.80 as near-term support, while saying a more decisive decline would likely require broader US dollar weakness, renewed foreign capital inflows, and stronger dollar-to-Taiwan dollar conversion by exporters.
Although investors have also been focusing on Taiwan’s tech-driven fundamentals and the government lifting its annual growth forecast to above 10%, the piece says the currency still lacks fresh capital flow to return to pre-selloff levels. It also flagged upcoming industrial production data and said inflows slowed to around $861 million last week from $6.5 billion in the prior week.