Taiwan dollar bulls look past AI-led selloff to year-end rally
Analysts say record trade surpluses and AI-related exports continue to generate underlying Taiwan dollar support.
Taiwan’s currency, the Taiwan dollar, has been weakened by global concerns surrounding artificial intelligence investments. However, analysts believe that the island’s strong economic performance and trade surplus may drive a year-end rally in the currency. Oversea-Chinese Banking Corporation and ING Bank predict the Taiwan dollar could appreciate to 31.60 and 31.50 per US dollar respectively, indicating an increase of roughly 3% from current levels.
Despite short-term worries linked to lofty AI stock valuations and foreign portfolio outflows, experts believe that fundamental trade support will ultimately prevail. Taiwan’s robust economic growth, current account surplus, and AI-driven semiconductor industry are all factors expected to contribute to the currency’s appreciation, with MUFG Bank’s Lin Li projecting a rise to 31.8 per US dollar by year-end and ING Bank’s Lynn Song expecting a high of 32.5 per US dollar within the year.
However, foreign capital flight and rising crude prices continue to put pressure on the currency, making volatility a dominant theme rather than sustained weakness. Analysts remain closely monitoring the currency’s performance around the 31.5-32.5 range, which has been deemed comfortable for the Central Bank of the Republic of China in maintaining relative stability.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
