Alarmed foreign media! The Taiwan dollar surged nearly 7%, and the central bank remained on hold. What is the plan behind Bloomberg's analysis?

Over the past two trading days, the New Taiwan dollar (NT$) has sharply appreciated against the US dollar by nearly 7%, with a single-day surge of up to 2.5%, shocking the foreign exchange market. However, under such intense volatility, Taiwan's central bank has chosen to remain passive, without any obvious intervention. Does this hide a complex geopolitical and international trade power struggle? International media Bloomberg offers its analysis:

Foreign Exchange Shock: New Taiwan Dollar Surges to Highest Level in Two Years

According to Bloomberg, the New Taiwan dollar has surged nearly 7% in two days, creating the largest weekly appreciation in two years, with a single-day increase of 2.5%. This surge caught the market off guard and raised questions about why Taiwan's central bank did not immediately intervene. In the past, when facing such drastic exchange rate fluctuations, Taiwan's central bank would typically step in to stabilize the market, but this time it remained unusually silent.

US Factors Emerge: Exchange Rate as a Potential Negotiation Chip?

Market analysis suggests that Taiwan and the US are currently negotiating bilateral trade agreements, and the New Taiwan dollar's appreciation may be related to this. Taiwan has long maintained a massive trade surplus with the US, especially in the semiconductor sector with TSMC's significant contribution. Some believe the US might be questioning Taiwan's "weak currency policy," viewing it as a non-tariff trade barrier. If so, Taiwan's central bank's decision not to intervene in the appreciation could be an attempt to reduce friction during negotiations.

Double-Edged Appreciation: Consumers Smile, Exporters Suffer

The Taiwan dollar's appreciation is beneficial for importers, such as the tapioca powder used in bubble tea imported from China, which will become cheaper. However, for export-oriented industries like semiconductors, it's a different story. TSMC noted last week that for every 1 percentage point appreciation, its operating profit margin will be compressed by nearly 0.5 percentage points. With the current 7% appreciation, TSMC's profits could face significant impact, presenting a major challenge for the entire export industry.

Exchange Rate Volatility Sweeps Asia, Funds Accelerating Local Repatriation

Bloomberg Asia Market Executive Editor Paul Dobson points out that this exchange rate volatility is not limited to Taiwan. Many Asian exporters are facing pressure from a weakening US dollar, leading to massive fund repatriation from US dollar accounts to avoid exchange losses. The Malaysian ringgit has recently appreciated significantly, showing a similar trend. Chinese exporters are also changing their long-standing strategy, shifting from holding US dollar assets to local currency, further intensifying regional currency appreciation pressure.

Can Hong Kong Hold On? Monetary Authorities Set Intervention Record

Besides Taiwan, the Hong Kong Monetary Authority set a record by buying US dollars over the weekend to maintain the Hong Kong dollar's linked exchange rate. This highlights that Asia is experiencing a wave of currency revaluation, especially under the backdrop of a potential long-term US dollar depreciation, drawing close attention to each central bank's intervention strategies.

Oil Price Decline Beneficial to Asian Economies? Impact Varies by Country

Meanwhile, the international oil price decline has different impacts across Asian countries. For energy-importing countries like Taiwan, falling oil prices combined with a strong currency will enhance purchasing power and help reduce import costs. However, for oil-producing countries like Malaysia, they might simultaneously face the dual impact of falling oil prices and local currency appreciation, potentially harming export revenues.

US-China Trade Atmosphere Warming? Asian Markets Observe Cautiously

Although the current volatility in Asian markets is closely related to exchange rate appreciation, the market is also closely monitoring the latest developments in US-China relations. Paul Dobson pointed out that the friendly signals from Washington to resume negotiations with China have led Asian investors to maintain a cautiously optimistic attitude. If both sides can ease trade tensions, it would be a significant positive for Asian markets. However, during the low liquidity Asian morning trading session, any statements or policy changes from the US side could be amplified, potentially causing short-term market volatility.