US Dollar / Taiwan Dollar

There are fewer than 20 daily closes on record for USD/TWD, too few for a volatility figure; it is left blank rather than guessed.

Over the last 60 sessions of daily returns, most inversely to LUNR (−0.47).

Its last close is at the 100th percentile of its own last 85 sessions, and its 20-day volatility at the 100th, near the top of its range for the period.

Market read: The USD/TWD is trading in a tight range, showing little conviction from either buyers or sellers today.

What it is

In USD/TWD the US dollar is the base currency, so the rate is the number of New Taiwan dollars per dollar and a rise means a weaker Taiwan dollar. The currency floats, but Taiwan’s central bank — formally the Central Bank of the Republic of China (Taiwan) — manages it actively, smoothing moves it considers disorderly. Deliverable trading takes place on Taiwan’s onshore interbank market during Taipei business hours, while offshore investors mostly use non-deliverable forwards settled in US dollars.

What drives it

Taiwan’s economy is dominated by electronics exports, with semiconductors at its heart, and the island has long run large current-account surpluses. Exporters converting dollar earnings, and the global appetite for chips, therefore underpin demand for the currency. Equity flows are the most volatile influence: foreign investors hold a substantial share of Taiwan’s stock market, heavily concentrated in chipmakers, and their buying and selling can move the currency quickly.

A distinctive force comes from Taiwan’s life insurers, which hold very large portfolios of US dollar bonds. How much of that currency exposure they choose to hedge, and whether they bring money home, can produce sudden swings in the Taiwan dollar unrelated to the day’s news. The central bank’s readiness to lean against rapid moves, often without announcement, is another constant. Interest-rate gaps with the US and cross-strait political tension add further layers.

How it trades through the day

Taipei’s onshore session falls mostly inside the Asia block (22:00–07:00 UTC), and that is when Taiwanese data is released and most deliverable volume trades. Outside those hours, through the London block (07:00–13:00 UTC) and the New York block (13:00–22:00 UTC), pricing comes mainly from the offshore forward market and tends to follow US technology shares and the broad dollar.

What it tends to move with

USD/TWD has historically moved inversely to the share price of Taiwan Semiconductor and to the Nasdaq 100, reflecting how much foreign equity money flows through chip stocks. It tends to move in the same direction as USD/KRW, since Korea shares much of the same technology exposure, and with USD/CNH when cross-strait or US–China tensions rise.