FX.co ★ Taiwan Dollar Rallies

The Taiwan dollar experienced a significant rise, increasing over 2% to 29.17 per U.S. dollar during a volatile trading session on Tuesday. This movement is largely attributed to anticipation surrounding potential rate cuts by the Federal Reserve, overall weakness in the U.S. dollar, and sustained foreign capital inflows to Taiwan. This appreciation has propelled the Taiwan dollar to a remarkable 12% increase since the start of the year, solidifying its position as Asia's strongest currency in 2025. The robust performance of the Taiwan dollar is largely driven by resilient technology exports—especially in the semiconductor sector—and heightened foreign interest in Taiwanese stocks, spurred by positive projections for AI-driven demand. The central bank’s passive stance has led to talk that authorities might be allowing the currency to strengthen as a measure to curb imported inflation. Nevertheless, the rapid appreciation is beginning to pose challenges for exporters, who are facing pressure on their margins. Investors are now closely watching for any moves from the central bank as the currency’s surge continues to challenge the current monetary policy approach.