Asian currencies: Taiwan dollar drops sharply
The Taiwan dollar fell 2.4% to 29.902 per US dollar towards the end of the trading day after surging last week to its highest level since April 2022.
The central bank aggressively intervened to sell the Taiwan dollar at the end of the second quarter, three bank traders told Reuters.
'TWD rally was a function of Taiwan lifers adding FX hedges, carry trade unwinding and strong equity inflows,' said Lemon Zhang, FX & EM macro strategist at Barclays, noting the move higher for the Taiwan dollar had been fast.
'We think near-term USDTWD should see limited downside, unless (there is a) substantial DXY move lower from here.'
Other regional currencies were supported on Monday by a subdued dollar index, with markets watching US President Donald Trump's massive tax-cut and spending bill, now before the Senate.
Among the gainers, the Malaysian ringgit rose 0.3%, while the Philippine peso and Thai baht gained 0.4% each. The South Korean won climbed 0.6%.
Most Asian currencies held up despite global headwinds.
In the first half of 2025, markets were jolted by Trump's sweeping tariffs on April 2 and the tariff policy flip-flops thereafter.
An escalating US-China trade war also roiled markets, before the trade rivals struck a deal that lowered duties sharply and opened up rare earth exports from China.
In June, a 12-day war between Israel and Iran sent oil prices higher, even as renewed concerns over the Federal Reserve's independence kept markets on edge.
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