The Taiwan dollar has rapidly appreciated over the past two trading days, with gains exceeding NT$1 each day, shocking the Taipei foreign exchange market. Li Zhenyu, Chief Economist at Taishin Financial Holdings, indicated that this surge is driven by two specific events rather than indicating a long-term trend. He explained that exporters rushed to stock up to avoid tariffs, providing significant upward pressure on the Taiwan dollar.

The Central Bank stated that the primary driving force behind the dollar's appreciation is the market's psychological expectation of strength, coupled with exporters' panic selling. Yesterday, the Taiwan dollar closed at NT$31.064 to US$1, appreciating 9.19 cents with a daily increase of 3.07%. Li Zhenyu noted that as export growth rates rise, the appreciation of the Taiwan dollar should increase, but once it reaches a certain threshold, it will negatively impact export competitiveness, leading to a decline in foreign trade momentum and subsequently a depreciation of the Taiwan dollar.

He also mentioned that significant capital outflows due to US interest rate hikes and the AI boom had previously suppressed the Taiwan dollar. Although two driving factors have led to a recent rebound, he emphasized that this is a one-time event rather than a change in long-term trend. He predicts that with a potential trade agreement between China and the US in the near future, and the waning momentum of early stockpiling, the appreciation of the Taiwan dollar will not continue.