Taiwan Dollar’s Best Rally in Decades May Stumble
- The currency’s bounce is unlikely to last due to trade hit
- Global recession, upswing in Covid cases in China pose threat
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Taiwan dollar’s biggest rally in almost a quarter of a century is set to unwind as a looming global recession cuts into the island’s technology exports.
The currency, which has risen more than 4% this month to 30.90 per US dollar, will probably weaken to about 33 by the end of the first quarter, Mizuho Bank Ltd. and RBC Capital Markets forecast, as overseas shipments shrink for a second straight month. The outlook isn’t bright with a global recession looming and big tech shedding jobs, while Covid-19 infections rise in China -- the biggest trading partner of the export-reliant economy.