Investing.com -- The Taiwan dollar experienced a surge in trading volumes on Monday, reaching a 16-year high of $2.95 billion. This increase was fueled by a slump in the value of the greenback and increased foreign demand for Taiwanese electronics ahead of impending US tariffs.
The Taiwan dollar rallied as much as 0.8% within the day, before state-owned banks reportedly purchased the greenback, causing the rally to taper off. The demand for Taiwan’s currency was spurred by a temporary halt in President Donald Trump’s tariffs on phones, computers, and consumer electronics. These goods are the mainstay of Taiwan’s exports.
Commerce Secretary Howard Lutnick and other administration officials confirmed on Sunday that the halt in tariffs was only temporary before they are transitioned to different levies.
On Monday, Taiwan’s state-owned banks purchased the greenback in an attempt to absorb some of the foreign inflows into the market, according to traders who wished to remain anonymous due to restrictions on public commentary. The repatriation of overseas investments by local funds also contributed to the Taiwan dollar’s gains.
The Taiwan dollar continued its upward trend for the seventh consecutive session on Monday, adding 0.3% to trade at 32.45 per dollar at 10:45 GMT.
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