Fed Governor Lisa Cook Warns Inflation Risks Remain as Rates Stay Steady 
U.S.-India Trade Framework Signals Major Shift in Tariffs, Energy, and Supply Chains 
Thailand Inflation Remains Negative for 10th Straight Month in January 
Russian Stocks End Mixed as MOEX Index Closes Flat Amid Commodity Strength 
RBI Holds Repo Rate at 5.25% as India’s Growth Outlook Strengthens After U.S. Trade Deal 
South Africa Eyes ECB Repo Lines as Inflation Eases and Rate Cuts Loom 
Trump Signs Executive Order Threatening 25% Tariffs on Countries Trading With Iran 
Bank of Japan Signals Readiness for Near-Term Rate Hike as Inflation Nears Target 
Dow Hits 50,000 as U.S. Stocks Stage Strong Rebound Amid AI Volatility 
Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The USD/TWD currency pair is expected to stay below 32.0 through to December 2018. As the surge of global commodity price begins to lose steam, import price pressure will wane. An interest rate hike will also attract more capital inflows and potentially drag Taiwan into another period of WPI deflation. However, the CBC will attempt to avoid that.
Meanwhile, Taiwan’s government remains cautious towards the economic outlook. Despite an export growth as high as 15.1 percent y/y in Q1, the official forecast of 2017’s GDP was lifted by a tiny margin from 1.92 percent to 2.05 percent, implying a slowdown of growth momentum from Q1’s 2.6 percent y/y to Q4’s 1.66 percent. CPI is projected to rise by 0.95 percent in 2017 and May’s 0.59 percent y/y, released today, has not come close to the target with Q4’s CPI projected to be negative (-0.67 percent).
"We believe the CBC can decouple from a potential Fed’s hike in both 2017 and 2018 and the central bank will regard a rediscount rate of 1.375 percent a comfortable level for now (previously we call for a hike of 0.125 percent from June onward)," ANZ Research commented in its latest report.
