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USD/TWD seen consolidating after Taiwan CPI surprise
Commerzbank expects Taiwan core inflation to stay above the CBC forecast, leaving room for a potential 12.5 bp rate hike and keeping USD/TWD in a 31.30 to 31.80 range.
Commerzbank said Taiwan’s August inflation data argues for a range-bound mood in the USD/TWD pair, after headline CPI rose less than expected due to favourable food base effects, while core inflation remains elevated.
The bank noted August CPI increased 2.0% year over year versus a 2.4% consensus, and eased to 2.3% in core CPI, still above the Central Bank of the Republic of China’s 2026 forecast of 1.9% for a fourth straight month.
On policy, Commerzbank said the central bank could raise its policy rate by 12.5 bp to 2.125% at its next quarterly meeting on 17 September, citing robust growth but persistent inflation risks.
In FX, it expects USD/TWD to consolidate between 31.30 and 31.80 near term, with JPY strength supporting the Taiwan dollar but higher oil prices potentially limiting gains, FXStreet cited the view as part of its commentary.