The Taiwan dollar moved sideways on Monday after the relatively weak trade numbers. The USD/TWD pair was trading at 30.67, where it has been in the past few days. It has jumped by over 3.65% above the lowest level in February.
Taiwan exports slip again
The Taiwanese economy has gone through significant challenges in the past few months as demand for semiconductors has eased. Data published on Monday showed that Taiwan’s exports continued falling in April of this year. Exports dropped by 13.3% in April after slipping by 19.1% in the previous month. They have dropped in the past eight straight months.
Imports have also suffered a similar fate. Taiwan imports dropped by 20.2% in April after falling by 20.10% in the previous month. In all, imports have fallen in the past six straight months. As a result, Taiwan’s trade surplus jumped to $6.71 billion from the previous $4.22 billion.
Taiwan, like South Korea, has been hit hard by the falling PC and semiconductor sales. This is in line with the relatively weak results we have seen from companies like AMD, Intel, and even Taiwan Semiconductor (TSMC). TSMC is an important company for Taiwan where it accounts for about 15% of the GDP.
Analysts believe that Taiwan’s share of the semiconductor market will continue falling in the next few decades as tensions between the United States and China continues. The US is investing billions of dollars to bring semiconductor manufacturing home. TSMC and Intel are all investing billions of dollars in the country.
The same is true in Europe, which is also investing billions of euros in the region. In March last year, Intel announced a 33 billion euro investment in the bloc.
USD/TWD technical analysis
The USD to TWD exchange rate has moved sideways in the past few days. It has moved to the 38.2% retracement level. The pair has also moved slightly above the 25-day and 50-day exponential moving averages.
It has also moved slightly below the important resistance point at 30.91. Therefore, the pair will likely remain in this range in the coming weeks. A bullish breakout will be confirmed if the price moves above the key resistance point at 30.91. A move above that level will push the pair to the next key resistance point at 31.20, which is the 23.6% retracement point.
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