The recent surge of the Taiwanese dollar is truly astonishing, soaring nearly 10% in just a few days and breaking through the 30 NT dollar mark. I took a close look, and there are actually several key factors driving this appreciation.

First is the U.S. tariff policy. When Trump announced a 90-day delay in implementing reciprocal tariffs, the market immediately anticipated a wave of bulk purchasing, benefiting Taiwan as a major export country. Plus, the IMF raised Taiwan’s economic growth forecast, leading to a rush of foreign capital inflows, which ignited the momentum for the NT dollar to appreciate. But what truly pushed the exchange rate higher was also the hedging operations of the financial industry. Taiwan’s life insurance companies hold a large amount of USD assets, and under the expectation that the central bank might be pressured by the U.S. to refrain from intervening in the forex market, they began to close positions in a concentrated manner to hedge, directly amplifying the NT dollar’s appreciation.

Will the NT dollar continue to rise? I looked at several analysis reports, and most experts believe it’s unlikely to reach 28 NT dollars. According to the real effective exchange rate index from the Bank for International Settlements, the New Taiwan dollar is currently in a “reasonably undervalued” state, with room for further appreciation, but it won’t keep rising infinitely. Interestingly, if we extend the timeframe to this entire year, the NT dollar has appreciated by 8.74%, the Japanese yen by 8.47%, and the Korean won by 7.17%. Basically, everyone is appreciating, and the NT dollar’s performance doesn’t seem that special.

For investors wanting to seize this trend, my advice is to adjust based on your risk tolerance. If you’re a beginner, don’t get scared by the rally and impulsively pour in money; start with small amounts to test short-term trading and get a feel for the market rhythm. Those looking to buy USD with NT dollars for appreciation can consider using forward contracts to lock in the gains. For long-term investing, the NT dollar might fluctuate between 30 and 30.5 NT dollars, but the overall trend remains relatively strong. The key is not to put all your funds into forex; keep forex positions within 5% to 10% of your total assets. The rest should be diversified into other global assets—that’s the smarter approach.

Additionally, stay updated on the central bank’s movements and the progress of U.S.-Taiwan trade negotiations, as these will directly influence future exchange rate trends. If you want to earn from the forex spread steadily, use low leverage when trading USD/NTD, and be sure to set stop-loss points. Many platforms offer demo accounts for practice; beginners can test their trading strategies there first, and once confirmed feasible, they can go live with real money.