TWD going DOWN


#121

I had a hunch that the devaluation of the Chinese Yuan would not be good news for the TWD. My hunch was that the TWD was tied in enough to the Yuan that the TWD has been one of the best performers almost anywhere since the Yuan was pegged to the USD. I am concerned that the Chinese will further devalue bringing the TWD down with it. The move from 30 to close to 33 isn’t fun for any of us sending money home but the TWD has still done well vs almost every world currency. Hopefully it doesn’t move to 35-40 in the next 6 months like the other currencies have. That is scary.


#122

it’s wiping out against the euro as I predicted. Historically euro: Twd has been 40:1’spmits returning to mean. Taiwan economy is highly dependent on China, it’s worrying.


#123

Another way to look at it… if the Yuan is truly de-pegging from the USD it also works both ways. If the dollar falls the Yuan won’t necessarily drop too next time around. If the NTD follows the Yuan more than the USD then it’s a positive come the next USD bear market


#124

what will happen if China tries to devalue more?'It will damage the markets they sell into causing financial chaos. I doubt they will devalue much more, the damage to their global market is already counter productive and other competitors will devalue also.


#125

what will happen if China tries to devalue more?'It will damage the markets they sell into causing financial chaos. I doubt they will devalue much more, the damage to their global market is already counter productive and other competitors will devalue also.[/quote]

They have barely devalued yet and still are overpriced compared to many of their low cost manufacturing competitors. At some point they are going to be concerned (or already are) about losing manufacturing because they have a strong currency.


#126

Devaluing more will not help them, because it’s not the TWD it’s the worlds major exporter and major commodity market which will cause financial turmoil in the markets they want to export to, they are trapped I think. Plus devaluing will not magically spur demand.


#127

TWD is irrelevant in China’s concerns but it could/should track with any movements in the Yuan. It is hard being the world’s major exporter when your manufacturing competitors are suddenly 20+% cheaper than you.


#128

Not sure if you get get it. Taiwan or some Micky
Mouse country can devalue their currency by a large amount and nobody really cares. If China devalues by a lot it causes massive earthquakes everywhere some of which can come back and destroy themselves. China’s major export markets include both emerging and developed economies plus when they devalue they can cause capital flight internally
And make it hard to pay off foreign denominated debt and hard to pay
For things like iPhones and oil and steel and milk and the list goes on.


#129

[quote=“headhonchoII”]Not sure if you get get it. Taiwan or some Micky
Mouse country can devalue their currency by a large amount and nobody really cares. If China devalues by a lot it causes massive earthquakes everywhere some of which can come back and destroy themselves. China’s major export markets include both emerging and developed economies plus when they devalue they can cause capital flight internally
And make it hard to pay off foreign denominated debt and hard to pay
For things like iPhones and oil and steel and milk and the list goes on.[/quote]

Almost everyone has devalued compared to the USD. Granted they let their currencies float freely w/o manipulation but there has been significant devaluation acround the world. Or are CA, EU and AU (for starters) just Mickey Mouse countries?


#130

One would think that a lot of hot money are exiting China no? They are running for the exits here in Taiwan. You can talk devaluation as much as you want, however if the selling pressure is massive, the devaluation will be forced upon you.


#131

Holy crap! TWD totally getting F’ed in the A right now. Sure am glad I don’t have a reason to send money to the States any time soon. Anyone see it getting back to 30:1 sometime next year?


#132

This is only based on the relationship to the USD. The TWD has held its own against most other currencies so basically the USD is kicking everybody’s asses. It isn’t great for us that send money back to the US but things are far, far worse in other countries. Just be very, very happy that you don’t work in Indonesia, Malaysia, Japan, Mexico, Brazil or many other countries.

At some point the dollar will be overbought just like a stock and it will retreat some but I don’t see it giving up all of the gains that it has made across the world. For that to happen there would have to be a major reversal in the US economy. I think the recovery is not as great as it has been advertised but it is the best of the major economies right now.


#133

This is only the beginning. Expect to see 35:1 within the next 12 months. The trend is now strongly in motion and we will - without a doubt - challenge the 2008/9 highs.
I’ve been short TWD since it broke the 31.5:1 level. The US Dollar is king and will be for the foreseeable future.


#134

This is only based on the relationship to the USD. The TWD has held its own against most other currencies so basically the USD is kicking everybody’s asses. It isn’t great for us that send money back to the US but things are far, far worse in other countries. Just be very, very happy that you don’t work in Indonesia, Malaysia, Japan, Mexico, Brazil or many other countries.

At some point the dollar will be overbought just like a stock and it will retreat some but I don’t see it giving up all of the gains that it has made across the world. For that to happen there would have to be a major reversal in the US economy. I think the recovery is not as great as it has been advertised but it is the best of the major economies right now.[/quote]

Except against the euro and gbp the TWD is also getting its ass kicked. Taiwan’s economy isn’t in a good situation right now being too connected to the mainland, and a lot of money rushing into the US and probably Europe too.


#135

[quote=“headhonchoII”]

Except against the euro and gbp the TWD is also getting its ass kicked. Taiwan’s economy isn’t in a good situation right now being too connected to the mainland, and a lot of money rushing into the US and probably Europe too.[/quote]

Is your timeframe <1 month? The EUR has been getting its ass kicked far worse than the TWD for the past 2 years. It shouldn’t be surprising that it is posting 1 month of gains vs the TWD.

The GBP has been stronger but even it is off over the past 2 years vs the USD.

I am disagreeing with you about Taiwan’s economy or mainland connections but this entire thread is focused on the wrong dynamic. Almost everything is down against the dollar unless your timeframe is short and it isn’t going to get better. The TWD vs USD rate could easily go to 35 as claimed in the thread but we will see similar moves in other countries as well.

The hard part to figure out is when will the dollar start moving in the opposite direction. Hell if I know.


#136

I looked at the trading range of TWD to USD over the last ten years, it’s very tight having fluctuated around 10%. We are at the edge of the range but we could go past it for a while the 35, but eventually strengthen again
Somewhat. When? Don’t know.
Against the Euro , TWD has traded at 40 for long periods. Just last year it was 39,
But then In a short time it dropped to 31 and now ramping back up over time. I think the euro and usd will remain relatively strong and a store of wealth. I think TWD will fluctuate within relatively tight bands so you can choose the timing by holding on to some money for a couple of years if necessary, you shouldn’t see inflation eat it away or a massive devaluation like Japan. I can’t see the TWD strengthening Anytime
Soon though given USS is strengthening and RMB weakening.
The recent drop in ntd was due to interest rates being cut I believe along with US saying they are putting up interest rates this year.


#137

I am old enough to remember when the NT was pegged to the Dollar at 40 to 1


#138

Wow. Taiwan dollar is really getting screwed. Forecasts I’ve read predict 1 USD to 34 by end of Spring. 1 USD to 35 NTD by the end of year.


#139

Good for exporters, bad for the rest.


#140

Massive headwinds against TWD due to the gorilla in the room, China, devaluing their currency (I think the speed of devaluation is a surprise) and having a shaky stick market and economy. I see euro strengthening more against the TWD. Remember the historical trading range against the euro above!
But one thing to be aware of is twd usually strengthens a bit around CNY as companies repatriate money to pay bonuses and need to convert into TWD.