Taiwan Dollar SURGES vs Dollar in Strongest Daily TWD Advance on Record

May 2, 2025 - Written by Tim Boyer

STORY LINK Taiwan Dollar SURGES vs Dollar in Strongest Daily TWD Advance on Record

The Taiwan Dollar surged to a 15-month high on Friday with the currency securing a daily gain of 3.8%, the largest advance on record.

The Dollar to Taiwan dollar (USD/TWD) exchange rate slumped to 30.40 from 32.10.

The move was magnified by local markets being closed on Thursday.

According to Barclays; “Despite the leg lower in USDTWD we are continuing to see significant selling from lifers, so our traders think the move could extend in the near term.”

Given the sensitivity to trade developments, high volatility will be inevitable.

There will be some speculation that the Taiwan dollar surge will be a harbinger of wider dollar selling out of Asia, especially if there is notable capital repatriation.

There were strong gains for equities with a 2.7% gain for the local bourse, recouping all the losses recorded earlier in April.


Hopes of an easing in US-China trade tensions helped trigger heavy buying of local assets.

According to a Chinese Ministry of Commerce spokesman; "US officials have repeatedly expressed their willingness to negotiate with China on tariffs."

He added; "China's position is consistent. If we fight, we will fight to the end; if we talk, the door is open. If the US wants to talk, it should show its sincerity and be prepared to correct its wrong practices and cancel unilateral tariffs."

According to local traders, there was a wave of panic selling by exporters while retail investors continued to repatriate overseas investments.

Barclays commented that Taiwan lifers jumping in to increase hedging on the move lower in the dollar.

Christopher Wong, currency strategist at OCBC commented; "The faster-than-expected pace of Taiwan dollar appreciation caught many market participants off guard, prompting a rush to convert USD into local currency."

He added "Recent gains in the Taiwan dollar have also been catalysed by prospects of dialogue between the U.S. and China."


Tim Waterer, market analyst at KCM Trade commented; "Traders are identifying more upside potential in Asian economies now that the White House seems to be more open to trade negotiations."

It will still be difficult for both sides to find a political off-ramp and confidence could dip again.

Domestically, GDP surged at an annualised rate of 9.67% for the first quarter of 2025.

On an annual basis, GDP grew 5.37% from the fourth quarter compared with 2.9% previously which was above consensus forecasts of 3.4% and the strongest figure for 12 months.

ING commented; “The main reason for the upside surprise was a swing of the net demand from the rest of the world back to positive territory, which contributed 1.03pp to 1Q growth after three consecutive quarters of negative contribution.”

Taiwan benefitted from the surge in US imports ahead of the tariff announcement with the GDP data a mirror image of the US where GDP was hurt by the surge in imports and dipped into contraction territory.

The bank has upgraded its full-year forecast from 2.8% to 3.2% YoY.

As well as US-China talks, US-Taiwan developments will inevitably be crucial with exports to the US accounting for 20% of total exports.

The potential for a US deal with Taiwan will also be pivotal.

According to ING; “we suspect that Taiwan should be among the economies able to strike some form of trade deal, given the semiconductor giant, TSMC's high profile announcement of investment into US manufacturing faciltiies is exactly the sort of action the Trump administration has been seeking, and many of Taiwan's key exports to the US such as semiconductors and computer products are either strategically important or sensitive to consumers.”

At this stage, MUFG has a year-end USD/TWD forecast of 32.60. According to the bank; “We expect moderate weakness of TWD against the dollar in Q2 and Q3, before some appreciation in Q4 helped by the weakening US dollar. Taiwan government officials mentioned that in the trade talk with US, the US did not ask Taiwan to increase the value of TWD.”

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