TW TWD Taiwan Dollar Loading... : Bullish and Bearish Analyst Opinions

The author explains that Taiwan dollar stability is maintained by unwinding lifer hedges and exporter dollar-selling policies, not a trade idea.

The tweet discusses controlled CNY appreciation and orchestrated TWD depreciation without expressing a forward-looking directional view on either currency.

Brad_Setser argues that all of Asia needs to appreciate, implying a weaker USD and stronger Asian currencies, with a stronger CNY pulling others like TWD higher.

The tweet notes Taiwan's rising current account surplus yet falling TWD, highlighting a divergence without expressing a directional trade view.

The tweet analyzes FX option pricing on TWD NDFs to estimate a 5-8% real-world probability of a Taiwan invasion, comparing it to Polymarket odds without expressing a personal directional trade view.

The tweet analyzes FX option pricing on Taiwan dollar NDFs to estimate a 5-8% real-world probability of a Taiwan invasion over the next year, comparing it to Polymarket odds.

The author sarcastically dismisses a bullish call on cheap Asian currencies as a "widow maker trade," implying high risk of reversal despite the claimed trend start.

The author sarcastically flags Asian FX as a potential widow maker trade while quoting a bullish thesis on the dollar savings pile shift, but hedges with "might" and sarcasm.

Brad Setser highlights that Korea and Taiwan's surpluses coincide with historically weak currencies, questioning the expected relationship between trade flows and exchange rates.

The author suggests Asian currencies are an imbalanced trade opportunity but uses hedged language and sarcasm, so no directional call is made.

Brad Setser explains that Taiwan dollar rates are structurally low and Korean retail and NPS drove foreign flows, but no forward-looking trade view is expressed.

Won and TWD gain from AI boom.

The Taiwanese Dollar is fundamentally undervalued and should strengthen against the USD, with a potential catalyst being increased scrutiny from the US Treasury.

The Taiwan Dollar (TWD) is likely to appreciate due to strong trade fundamentals, a risk that local institutions appear to be under-hedged against.

The author believes the Taiwanese Dollar is too weak and that the US will likely exert pressure for it to strengthen, creating a catalyst for appreciation.

1. THE FACT: If adjustment doesn't happen on the import side, it can still happen on the export side, which is why the exchange rate matters. 2. THE BRIDGE: This tweet reinforces the idea from tweet [1] that exchange rates are a key mechanism for trade adjustment. If the US trade deficit is to close, and import adjustment isn't happening, then export-side adjustment (implying stronger foreign currencies) is necessary. 3. THE VERDICT: Exchange rates of key trading partners (KRW, TWD, CNY, JPY) are crucial for trade rebalancing, suggesting they are currently undervalued and may need to appreciate.

1. THE FACT: The US trade deficit will not close if KRW, TWD, CNY, and JPY remain at current levels. Policy inconsistencies need to be sorted. 2. THE BRIDGE: The current levels of these currencies are contributing to the US trade deficit, implying they are undervalued relative to what would be needed for deficit reduction. This suggests a future appreciation is necessary, or that their current undervaluation is unsustainable in the long run. 3. THE VERDICT: These Asian currencies are likely undervalued and may face pressure to appreciate, making them potential short candidates if one believes their current levels are unsustainable given global trade imbalances.

1. THE FACT: The gap between the CNY and the KRW/TWD/JPY is interesting. 2. THE BRIDGE: An "interesting" gap suggests potential for relative value trades or a re-evaluation of these currencies' valuations against each other. 3. THE VERDICT: Monitor the relative performance and valuation of CNY, KRW, TWD, and JPY for potential future trades.