Taiwan Dollar: Mildly hawkish CBC but flows drive – OCBC
OCBC strategist Christopher Wong highlights that Taiwan’s CBC kept its policy rate at 2% for a tenth straight quarter with a mildly hawkish tone, sharply raising 2026 growth and inflation forecasts while flagging sticky services inflation.
OCBC strategist Christopher Wong notes that Taiwan's CBC maintained its policy rate at 2% for the tenth consecutive quarter with a mildly hawkish outlook. This decision led to upward revisions in growth and inflation forecasts for 2026, while also highlighting sticky services inflation. However, the bank emphasizes that short-term USD/TWD movements will primarily be influenced by foreign equity flows, tech sentiment, and the overall USD trend, rather than policy changes.
The TWD remained stable despite a stronger US dollar, supported by a rebound in domestic equities and renewed inflows of foreign equity after five days of selling. While the unchanged policy rate provides limited policy support, foreign equity flows and the broader USD movement are expected to drive near-term direction. A pullback in US yields or stabilization in tech equities could help, while renewed foreign selling may sustain USD/TWD support.
Bullish momentum on the daily chart remains intact, but a rise in RSI hints at overbought conditions, with potential consolidation or a pullback intra-day, particularly if risk sentiment stays strong. Support is identified at 31.83/86 (100 DMA, 50% Fibonacci retracement of 2026 low to high), with a secondary support at 31.71/73 (21, 200 DMAs, 61.8% Fibonacci). Resistance is located at 31.90/32 (38.2% Fibonacci, 50 DMA).
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