Taiwan Dollar Gains on Apple-Related Stock Inflows: Inside Asia
Comment of the Day

March 21 2017

Commentary by Eoin Treacy

Taiwan Dollar Gains on Apple-Related Stock Inflows: Inside Asia

This bulletin by Kartik Goyal for Bloomberg may be of interest to subscribers. Here is a section:

Taiwan dollar advances 0.3% after closing at the strongest level in more than two years Monday

TWSE climbs 0.6%; inflows into stocks exceed $3.8 billion for 2017, the third-biggest in Asia, according to data as of Monday

Stocks including Wistron gain on Apple-related optimism, with Fubon Securities raising rating on the stock

Ten-year bond yield rises 2bps to 1.14%

Eoin Treacy's view

The Taiwan Dollar has appreciated by more than 10% against the US dollar over the last 12 months and extended that advance today. It is overbought in the short-term but its recent strength has broken the Dollar’s five-year progression of higher reaction lows suggesting a medium-term change to the relationship between supply and demand. 

The TAIEX Index has been ranging below the psychological 10,000 level since 1990. With Wall Street pulling back and an overbought condition on the currency there is scope for some consolidation, but a sustained move below 9250 would be required to question medium-term scope for a successful upward break.  

The iShares MSCI Taiwan ETF (EWT) shares the TAIEX’s short-term overbought condition 

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