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Investing.com - Bank of America forecasts the Taiwan dollar will strengthen against the U.S. dollar in the second half of 2025, according to a recent research note.
The bank sees "further downside risks" to its year-end forecast of 28.8 for the USD/TWD exchange rate, suggesting the Taiwan dollar could appreciate more than initially expected. This outlook aligns with Bank of America’s broader view of U.S. dollar weakness in the latter half of 2025.
Strong export performance from Taiwan is driving the currency’s expected appreciation, with increased corporate hedging and continued spot U.S. dollar selling as key factors supporting the Taiwan dollar. These fundamental drivers reflect Taiwan’s robust trade position.
Bank of America acknowledges that liquidity considerations may temporarily slow the pace of the Taiwan dollar’s appreciation against the U.S. dollar. Despite this potential constraint, the bank maintains its overall bearish outlook on USD/TWD.
The financial institution recommends investors "fade" any significant increases in the USD/TWD rate, suggesting opportunities to sell the U.S. dollar against the Taiwan dollar when the exchange rate rises substantially.
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