Taiwan Dollar Surges on Tech and AI Investment Inflows

Taiwan's currency, the Taiwan Dollar (TWD), has seen a surge in value against the US Dollar (USD) due to strong foreign portfolio inflows and domestic equity outperformance. Strategists from OCBC highlight that these flows have contributed to the TWD's appreciation, with it briefly touching 31.71 versus the USD.

The Taiwan equities market saw net buying of around $372mn by foreign investors, extending a recent trend of inflows. This interest in tech and AI-themed investments is likely to continue drawing portfolio inflows, supporting the TWD.

However, OCBC strategists caution that resident outflows and potential smoothing will temper the pace of appreciation. The daily chart shows signs of waning bullish momentum, with the Relative Strength Index (RSI) turning lower.