TWD going DOWN


#1

TWD is slipping steadily against the USD . Are you paying attention? If you have all your savings in TWD and want to use that money overseas you might want to!

English teachers everywhere crying into their 7-11 beers as their riches evaporate. Taiwan based businessmen rubbing hands gleefully. :popcorn:

TWD is about 10% down off recent highs to the USD. How low can it go? The yen has dropped 40% and Abenomics is in full swing with another 4 year term. If the US economy keeps picking up see a further flight of money back into the US and away from Asia.

I’m just thinking back to all the ‘smart’ landlords of Taiwan and China who noticed the yield in Japan was much better so bought an apartment or two in Tokyo. Ouch.

P.S. Fucked Gaijin :roflmao: , using my powers of inspiration I have come up with something creative for Taiwan…Fucked Laowai

fuckedgaijin.com/forums/view … 0&p=351685


#2

Thankfully the Canadian dollar has been sliding too, so the pain is not that brutal (yet) for some of us from north of the USA.

But yes, a lot of international transactions are in USD, so the slide will hit us too. And it’s pretty clear that the folks in charge of Taiwan welcome a relatively weak TWD.

Guy


#3

I"d say they’ll drop it to 33 minimum or even to 35 if they hear a lot of complaints from local businesses. If you look at the chart the government seems to be slowly but steadily moving it down (of course the finance minister doesn’t admit to this…but just look at what they do not what they say).


#4

TWD is going down. AUD is going down. Most of my income comes in USD. Happy days. :yay:


#5

It’s good for me all round. I am paid in US and the NT i have converted in my savings is still appreciating on the malaysian ringgit. :discodance: :bravo:


#6

Maybe they will fix it back to 40/1 like it was for decades?


#7

On the other hand Tokyo is adding 10,000 new hotel rooms for the 2020 Olympics and tourism is booming because of the weakening yen. Flights to Japan are packed and accommodations in popular tourist areas are hard to find. Being paid in foreign currency and paying in yen is turning into a gold mine for many investors in Japan.


#8

This was indirectly mentioned in the housing thread where someone contended that they will keep interest rates in Taiwan low to prop up the shaky housing market. This is one consequence of that.

I’m not a fan of this personally since pay isn’t going to increase and I convert my savings into USD’s and store them there. Good for the few dollars that I have but not good for the future. It’s very difficult for us to measure the benefits/negatives of a weaker national currency but a weaker national currency could lead to wage/job growth within a country and that is really needed within Taiwan for the middle/lower class. This ties in with Winston’s Japanese mention.


#9

I don’t think this is good for most people. If the Taiwan dollar was stronger people in Taiwan would have more spending power overseas for one. We don’t need anymore tourists in Taiwan, already got a tonne of Chinese and local tourist jamming up everything and making accomodation expensive :bow: . Wages are already depressed. Imported goods will become more expensive so expect more crappy oil and foodstuffs all round as laobans cut corners to avoid raising prices. Foreign services will become relatively more expensive, many Taiwanese will find it harder to study or travel overseas. If you have assets in Taiwan and sell them you will get much less in your pocket if converted and brought out of Taiwan.
A cheaper NTD might raise investment, but not when Korea and China and Japan are doing the same, besides, if it’s just Taiwanese businesses investing they will not offer any better conditions nor boost industry mix or employment mix much.
One reason the central bank can get away with tanking the TWD now is because oil price have dropped so much, so consumers wouldn’t get a shock when filling their tank or using electricity.


#10

[quote=“headhonchoII”]I don’t think this is good for most people. If the Taiwan dollar was stronger people in Taiwan would have more spending power overseas for one. We don’t need anymore tourists in Taiwan, already got a tonne of Chinese and local tourist jamming up everything and making accomodation expensive :bow: . Wages are already depressed. Imported goods will become more expensive so expect more crappy oil and foodstuffs all round as laobans cut corners to avoid raising prices. Foreign services will become relatively more expensive, many Taiwanese will find it harder to study or travel overseas. If you have assets in Taiwan and sell them you will get much less in your pocket if converted and brought out of Taiwan.
A cheaper NTD might raise investment, but not when Korea and China and Japan are doing the same, besides, if it’s just Taiwanese businesses investing they will not offer any better conditions nor boost industry mix or employment mix much.
One reason the central bank can get away with tanking the TWD now is because oil price have dropped so much, so consumers wouldn’t get a shock when filling their tank or using electricity.[/quote]

Someone would need multiple masters and PHD’s of economics to really understand and predict all of the scenarios. And even then they would likely be wrong.

Tourism is a small factor for a country like Taiwan but foreign investment in Taiwan would further decline if the TWD stayed strong while the competing regional currencies became weaker. I could easily see a scenario where a strong Taiwan currency led to higher unemployment and higher underemployment. You mention negatives like study and traveling overseas but it’s hard to do that if you don’t have a good job in the first place.

I also think you are jumping the gun on ‘the tanking of the TWD’. This is true if you are only measuring it against the USD. This is also true of many major currencies around the world and the TWD is performing stronger than many others.


#11

Sure I’ve only mentioned the negatives, which I still think outweigh positives, especially in a beggar thy neighbour type currency devaluation. It’s effectively making most people poorer even if it’s impossible to tell what will happen yet for sure. I’m just mentioning this because the Yen has dropped 40%, the rouble 50% and the Korean won has fluctuated like crazy over the last few years, if you want to convert your TWD into USD it would be something you would need to be very aware of. It would also make Taiwan even less of an attractive place to come to work than it already is, if they are offering pay in TWD. If you have all your money in TWD it would be very wise to hedge with USD now.


#12

I buy in Taiwan and sell overseas. I see a problem with my spending overseas on vacations, childrens education and stuff, however the increased take over the business more than makes up for that. i prefer to swap money over to the EU when the EUR is low, however cannot always time that well. Hope I got it right yesterday.


#13

The TWD going down is good news for the Taiwan-based companies that export to the U.S. The EUR is at 39.05 NT$, not a bad moment to send money from Europe to Taiwan, either, but I wouldn’t send TWD to Europe at least until the EUR is down to 38 NT$.


#14

Some times your hand is forced.


#15

You also left out the need raise interest rates to maintain a strong currency and the damage that could do to a housing market that is perched on the edge.

I also think it’s premature to look at a 5% movement and compare it to the 40-50% movements that you mention. The USD is doing this to every currency right now. In fact Taiwan is faring better than most countries which would indicate that it’s probably stronger overall in the world picture of things. I’m not going to really care until it’s 33+ TWD to the USD. This is almost in the noise range.


#16

Well that’s the point, there is still time to move some savings into USD, to spread the risk, especially if you have future plans involving USD.


#17

The point is that you’re a doomsdayer? Where are the signs that the TWD is headed to a big plunge relative to the USD? We’re talking about a 5% move currently and it has held up better than many of the world’s major currencies.


#18

The point is that you’re a doomsdayer? Where are the signs that the TWD is headed to a big plunge relative to the USD? We’re talking about a 5% move currently and it has held up better than many of the world’s major currencies.[/quote]

Exactly!

Don’t count your chickens before they’re hatched.


#19

In somewhat related news: the cheap Yen does not benefit the common people in Japan.

cnbc.com/id/102269628

The TWD is much more expensive now, in Yen, then it was 2 years ago (just to support what others have already suggested, namely that the TWD is the least one to worry about among the currencies that are sliding against the US$).


#20

My point I’m making all along is that it has a relatively high chance of getting devalued further precisely because it has hardly adjusted so far, so don’t say you haven’t been warned. It might not be much or it might be a lot, it’s a real possibility though.
it’s not about counting chickens, it’s about keeping the fox out of the henhouse before the eggs are eaten.