The Taiwan dollar showed a slight decrease of 0.2 points this week, ending a nine-week uptrend. With the stock market cooling off, foreign investors continued to sell and transfer funds out. Furthermore, the volatile USD movement heightened market anticipation for upcoming US unemployment and non-farm employment data.

This week, the Taiwan dollar depreciated by 0.9 points against the USD, closing at 29.931 TWD, thus reversing the previous two days of appreciation. The combined trading volume at the Taipei and Yuanta foreign exchange brokerage firms dropped to 15.42 billion USD. The weekly decline in the Taiwan dollar was two points, marking the end of its continuous nine-week appreciation.

In recent times, exchange rate fluctuations have noticeably converged, with this week’s high point at 29.825 TWD and the lowest at 30.036 TWD, showing a narrow trading range. An official from the foreign exchange bank pointed out that recent weak employment data from the US, along with the Fed's Beige Book reflecting declining economic momentum, has led to growing expectations for an interest rate cut in the latter half of the year, causing the USD index to weaken.

However, positive expectations arose from calls between US and Chinese leaders, while interest rate cuts in the eurozone also supported the USD. Major Asian currencies continue to consolidate within their respective ranges. Market participants are closely watching the US unemployment and non-farm employment data that will be released on Friday. If the performance is weak, the USD may drop further, and the Taiwan dollar could test the 29.8 TWD level next week.

Additionally, the effective date for the US’s corresponding tariffs is approaching, with ongoing trade negotiations with multiple countries. If there are positive developments, it is expected to uplift the USD's movement. Furthermore, the central bank continues to monitor the foreign exchange market dynamics, and in the short term, the Taiwan dollar is likely to consolidate in the range of 29.8 to 30.1 TWD.

Market expectations are generally that the Fed will take a wait-and-see approach to interest rates in June, with focus shifting to subsequent statements and the interest rate dot plot. Specifically, whether there will be a downward revision of the annual economic growth forecast or a dovish signal released will affect future market capital dynamics and exchange rates.