The USD/TWD currency pair is expected to trade lower amid renewed equity inflows ahead of the Trump-Xi Summit scheduled to be held between November 30 – December 1, according to the latest research report from Scotiabank.
The TWSE share index has been rallying in line with rebounding S&P500 index, indicating improved risk sentiment. The VIX index has subsided further in tandem with an orderly rise in the 10-year UST yield this week, supportive of risky assets in general.
Foreign investors bought a net USD132 million of local main board stocks for a fourth consecutive session on Thursday, bringing total net purchases of local shares to USD 463mn week-to-date.
In the coming weeks, the 10-year UST yield and the US-China tensions will continue swinging global and regional risk sentiment and driving EM Asian currencies.
"In addition, we see emerging expectations of the TWD appreciation as USD/TWD NDF is trading at a discount to USD/TWD DF," the report added.


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