The US dollar trend shifts, and the New Taiwan dollar appreciates, stuck at the 31.4 mark

Turning Signal in the Forex Market

The strong dollar trend is showing signs of easing. Recently, Federal Reserve officials have expressed dovish stances, and as market expectations for rate cuts increase, the USD index has noticeably retreated from its previous highs, currently hovering around 100.16. This change has triggered a chain reaction in Asian currency markets, with the New Taiwan Dollar (NTD) rebounding accordingly.

Dual Drivers Behind the NTD Appreciation

Today’s market highlight is the shift in rate hike expectations. As the possibility of Fed rate cuts gains renewed attention, the attractiveness of the dollar has significantly diminished. Meanwhile, Taiwan’s stock market performed strongly today, led by electronic and large-cap stocks, injecting upward momentum into the NTD. After opening at 31.42, the NTD quickly rose to 31.405, a gain of 4.2 cents, demonstrating a certain resilience in appreciation.

Regional Currencies Rebound Generally, but Upside Limited

Major Asian currencies like the Japanese Yen and Korean Won also strengthened. However, analysts point out that the sustainability of this rebound faces constraints. Although the USD index has pulled back somewhat, it remains above the key level of 100, indicating that the overall bottom of the dollar trend remains relatively strong. This suggests that the appreciation of the NTD and other regional currencies may not expand infinitely.

Can the NTD Hold Key Levels?

Currently, the NTD is oscillating around 31.415. To break through the psychological barrier of 31.4, continuous foreign capital inflows and a strong Taiwan stock market are necessary. At the end of the month, export-related forex selling also provides support. Market participants believe that if the dollar continues to weaken and foreign net inflows persist, the NTD may challenge the 31.3 level.

Risks Investors Should Watch

Traders are reminded that international currency markets remain volatile. Factors such as the evolution of the rate hike cycle, U.S. economic data releases, and China’s economic performance affecting regional liquidity could alter exchange rate expectations. Export-oriented market participants should consider modestly selling forex around 31.4 to lock in profits, while importers can patiently wait for retracement signals before making strategic moves.

Summary

The recent rebound of the NTD offers new possibilities for the market, but sustaining upward momentum requires support from multiple factors. The future direction of the dollar, the certainty of rate cut expectations, and the stability of foreign capital flows will all determine whether the NTD can successfully maintain its appreciation gains.