OCBC strategist Christopher Wong highlights that Taiwan’s CBC kept its policy rate at 2% for a tenth straight quarter with a mildly hawkish tone, sharply raising 2026 growth and inflation forecasts while flagging sticky services inflation. However, the bank stresses that near-term USD/TWD direction will be driven more by foreign equity flows, tech sentiment and the broader USD move than policy.

Policy support versus equity flows

“TWD held broadly steady despite the post-FOMC USD strength, helped by a rebound in domestic equities and a return of foreign equity inflows after five straight sessions of selling.”

“Taiwan’s CBC kept its policy rate unchanged at 2% for a tenth straight quarter but the hold carried a mildly hawkish undertone. CBC raised its 2026 growth forecast sharply to 11.48%, lifted its inflation forecasts and flagged sticky services inflation, but stopped short of signalling an imminent hike.”

“That may offer some policy support at the margin, but near-term direction is still likely to be driven more by foreign equity flows and the broader USD move. A pullback in US yields or stabilisation in tech equities would help, while renewed foreign selling could keep USD/TWD supported.”

“Bullish momentum on daily chart intact but rise in RSI moderated near overbought conditions. Some consolidation or risk of pullback is not ruled out intra-day, especially if broader risk sentiment holds up.”

“Support at 31.83/86 levels (100 DMA, 50% fibo retracement of 2026 low to high) before 31.71/73 levels (21, 200 DMAs, 61.8% fibo). Resistance at 31.90/ 32 levels (38.2% fibo, 50 DMA).”