Commerzbank notes that USD/TWD has risen for five consecutive sessions to 31.68, driven by foreign equity outflows as global tech stocks correct.
Taiwan’s exports and imports are surging on AI-related demand, while CPI has moved above the central bank’s 2% target
Even so, the CBC is expected to keep its policy rate unchanged at 2% at the upcoming meeting. Equity outflows and CPI lift USD/TWD “May exports jumped 51.7% yoy (Bloomberg consensus: 41.2%) vs 39.0% in April, marking the fifteenth consecutive month of double-digit growth. Integrated circuit exports surged 58.3% vs 40.5% in April, supported by robust demand for leading-edge chips used in AI-model training and token generation.” “Imports also surprised to the upside, rising 54.9% yoy (Bloomberg consensus: 40.3%) vs 29.2% in April.
This was driven by firm investment momentum as capital goods imports rose 54.7% vs 33.3% in April. The May trade surplus widened to USD17.9bn (Bloomberg consensus: USD17.5bn) vs USD14.4bn in April.” “Looking ahead, inflation is expected to climb further. Headline inflation averaged 1.5% in the first five months of the year and the government is projecting 1.9% for this year.” “May CPI was slightly higher than expected at 2.2% yoy (Bloomberg consensus: 2.1%) vs 1.7% in April.