As Nancy Pelosi Visit Sparks Fears, Taiwan Currency Loses Key Level Against US Dollar

The Taiwan dollar fell below the psychological mark of 30 per dollar for the first time since June 2020 led by geopolitical risks and weaker economic growth.

Sentiments turned sour ahead of U.S. House Speaker Nancy Pelosi’s potential visit to the island and with manufacturing activity being the weakest since May 2020, reported Bloomberg.

Expert Take: Khoon Goh, head of Asia research at Australia & New Zealand Banking Group, told Bloomberg there may be some political risk priced into the Taiwan dollar due to Pelosi’s visit to Asia. “This is the main reason why the Taiwan dollar has underperformed in the region despite the greenback being weaker,” Goh said.

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Price Movement: The Taiwan dollar was trading close to the 29.998 level against the dollar in Asia's evening session. Sources told Bloomberg that exporters sold the dollar above 30 although state-backed banks haven’t started providing dollar liquidity.

What’s In Store: ING Bank NV holds a bearish outlook on the currency led by fundamentals and weak demand for semiconductors. “That’s driven mainly from weak demand for smart devices due to lower purchasing power in mainland China and high inflation in US and Europe,” said Iris Pang, chief China economist at the bank, according to Bloomberg.