An unprecedented two-day surge in Taiwan’s currency is the latest leg of a scramble out of the U.S. dollar and signal of disquiet in markets as U.S. President Donald Trump’s trade war rattles confidence and disrupts trade relationships.
Taiwan occupies one of the most valuable and vulnerable points in the global economy, as the dominant manufacturer of high-end computer chips and supplier to both the U.S. and China.
Its currency, usually contained by a central bank with a mandate for stability, has leapt 8% in two days, with traders complaining of no buyers for U.S. dollars that insurers, exporters and investors suddenly wanted to sell.
The precise trigger for the sudden rise was not clear.
Yet the move coincided with the end of U.S.-Taiwan trade talks in Washington, which fuelled speculation of an agreement to weaken the greenback in return for trade concessions.
Such a deal has been repeatedly denied by the central bank, but not entirely believed by a market which sees the Taiwan dollar’s jump having its tacit approval, as well as likely to be welcomed by the United States.