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

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.