Goldman Sachs Sees U.S. Dollar Holding Firm as Strong Economic Data Supports Outlook 
RBNZ Holds Interest Rates Steady but Signals More Hikes Ahead in 2026 
BOJ Raises Interest Rates to 1% as Inflation Pressures Persist 
South Korea Central Bank Holds Interest Rates Steady Amid Inflation Concerns 
China’s AI Manufacturing Boom Masks Weak Consumer Economy, Citi Says 
Jerome Powell Warns Against Politicizing the Federal Reserve, Defends Democratic Institutions 
BOJ June Rate Hike Likely as Inflation Risks Rise Amid Middle East Tensions 
Taiwan Central Bank Likely to Keep Interest Rates Unchanged Through 2027 
RBA Expected to Hold Interest Rates at 4.35% as Markets Watch AUD/USD and ASX 200 
Fed Chair Kevin Warsh Signals Policy Overhaul as Hawkish Rate Outlook Rattles Markets 
We emphasize potential trading opportunities related to anomalies or dislocations in emerging market currencies.
TWD has been too strong versus rate differentials,
The TWD is more correlated to interest rate differentials than most EM currencies; the move lower in USDTWD in the past month has far exceeded levels consistent with rates.
Assuming the Fed hikes by year end (we expect a rate hike in December) or at the minimum the market continues to ascribe a decent probability to a near-term rate increase coupled with the likelihood that the CBC eases, rate differentials should move further in the USD’s favour.
Taiwan is also susceptible to renewed fears of China’s growth slowdown. While negative forward points provide positive carry in shorting the TWD.
Hence, we encourage longs in USDTWD on its attractive carry and China exposure sentiment toward EM currencies could be in the procedure of shifting and we prefer to focus on regional low yielders in expressing a bullish dollar view. The slew of hawkish commentary from Fed officials in recent weeks as put the possibility of a rate hike back in play for H2.
