Taiwan Dollar Forwards Set to Retreat as Tariff Concerns Grow

A popular Taiwan dollar derivative is starting to unwind some of its recent gains as rising trade tensions convince overseas investors to cut purchases of the island’s stocks and reduce demand for hedging.

Taiwan dollar non-deliverable forward points, financial instruments used to hedge against currency risks, slid Wednesday on concern the island is running out of time to reach a US trade deal before the Aug. 1 deadline, and also due to broad US dollar strength. The contracts had rallied earlier this month as global funds used them to hedge their purchases of Taiwan stocks.