The Taiwan Dollar (TWD) has recently extended its gains against the US Dollar (USD), briefly strengthening to near 31.71 before partially paring those gains, according to OCBC strategists Sim Moh Siong and Christopher Wong. This move was primarily supported by robust foreign portfolio inflows, with foreign investors being net buyers of approximately USD372 million in Taiwan equities, continuing a trend of strong inflows observed late last week. The outperformance of domestic equities, particularly those tied to technology and AI themes, has been a key driver of this demand for TWD [1].
OCBC notes that while persistent foreign buying could further bolster the TWD, resident outflows and potential central bank smoothing operations are expected to moderate the pace of appreciation. Technical analysis indicates that bullish momentum remains intact on the daily chart, though signs of waning momentum and a lower RSI suggest some consolidation may occur. Key support is identified at the 31.70/71 levels, with resistance at 31.83/86 [1].
MUFG’s Michael Wan adds that improved risk sentiment and optimism around AI—specifically referencing Meta’s new personal assistant Muse—have contributed to a slightly stronger Dollar and stable developed market yields. Wan argues that Asia FX, including TWD, could continue to benefit from ongoing AI-driven infrastructure build-out, with a shift in value towards applications and inference rather than advanced chip manufacturing. MUFG maintains a positive outlook on Asia’s AI sector, expecting robust overall growth despite a projected modest slowing in exports in 2027. The bank continues to favor currencies such as KRW, TWD, MYR, and SGD, citing their tech linkage [2].
Additionally, MUFG highlights that the Chinese Yuan (CNY) is expected to perform well with contained volatility ahead of the Trump-Xi summit, and that the general positive tone from US-China talks has further supported risk sentiment in the region [2].
CONCLUSION
Foreign portfolio inflows and strong performance in tech and AI-related equities have underpinned recent gains in the Taiwan Dollar, though the pace of appreciation may be tempered by resident outflows and potential smoothing. Both OCBC and MUFG remain positive on the outlook for TWD and other tech-linked Asian currencies, citing continued AI-driven growth and improved risk sentiment as supportive factors.