The Taiwan dollar (TWD) has once again reached the 29 level against the US dollar! On Monday (May 26), it appreciated by 2.3 points, opening at 30, and then sharply rebounded, hitting a high of 29.857 in the intraday trading, up by 1.66 cents. It closed at 29.935, marking the highest closing level since February 6, 2023.

This strong performance is primarily due to concerns over US fiscal policies and President Trump's suggestion of imposing a 50% tariff on the EU starting June 1. He threatened that Apple would face at least a 25% tariff if it did not relocate iPhone production back to the US, creating panic in the market. Additionally, Moody's downgrade of US credit ratings has pressured the dollar, causing the dollar index to decline by 1.9% over the week, the largest weekly drop since early April.

Analyst Li Qizhan said that the appreciation of the Taiwan dollar is not likely to significantly harm export competitiveness, especially since surrounding major Asian currencies, such as the yen and won, are also strengthening. He suggested that if the dollar continues to decline, there will be greater room for the Taiwan dollar to appreciate, and those looking to buy USD should do so in batches.

Li further pointed out that as the Taiwan dollar appreciates, exporters may face pressure to sell, and the central bank's ability to stabilize the exchange rate will once again be tested, especially as the end of May approaches and exporters are likely to sell their currency. For those considering investing in the US market, now might be a good opportunity to accumulate USD at a lower rate.