The Taiwanese dollar has been skyrocketing recently, breaking the 30 NT dollar mark in just a few days, with an alarming increase. I looked at the market data, and from the beginning of the year until now, the NT dollar has appreciated nearly 9%, making it the most aggressive among Asian currencies.

Upon closer observation, there are several drivers behind this rally. First is the expectation of U.S. tariff policies; the market generally believes Taiwan's exports will benefit in the short term, leading to an influx of foreign capital. Second is the current dilemma faced by the central bank, which has historically been able to effectively suppress the NT dollar's appreciation, but now fears being labeled as a currency manipulator, limiting its intervention space. Additionally, Taiwan's insurance companies and large corporations are engaging in extensive hedging operations. These factors combined have caused this unusual volatility.

So, what is the outlook for USD/NTD in the future? Honestly, breaking through the 28 yuan level is quite difficult, and no one in the market truly expects it to rise that high. I noticed a report from UBS indicating that the NT dollar's valuation has shifted from undervalued to relatively fair, and the foreign exchange derivatives market shows the strongest appreciation expectations in five years. But from a longer-term perspective, the NT dollar against the USD has mainly fluctuated between 27 and 34 over the past decade, so this rally should still be within a reasonable range.

If I had to give a forecast for USD/NTD, the key still depends on the Federal Reserve's moves and the progress of Taiwan-U.S. trade negotiations. The central bank might increase intervention when the NT dollar's appreciation approaches its tolerance limit, so short-term volatility is expected. Some traders want to take this opportunity for short-term gains; my advice is to start with small amounts to test the waters, rather than going all-in, as risk management is crucial. For long-term investing, the NT dollar is likely to oscillate within the 30 to 30.5 range, and overall, Taiwan's economic fundamentals remain stable.

For steady profits, low leverage trading combined with stop-loss strategies is fundamental. But most importantly, keep a close eye on central bank policies and the latest developments in U.S.-Taiwan trade, as these will directly influence the future trend of USD/NTD. Also, don’t put all your funds into the forex market; diversifying with Taiwan stocks or bonds can better spread risk.