Last year's Taiwan dollar market was truly intense. I remember it skyrocketing nearly 10% in just two trading days, jumping straight past the 30 NT dollar psychological barrier, marking the biggest single-day gain in 40 years. Market sentiment completely flipped; just a month earlier, people were worried about the Taiwan dollar breaking below 34 or 35 NT dollars, but then it was hit by a strong rally that caught everyone off guard.

Later, I took a closer look, and this wave of Taiwan dollar strength was mainly triggered by Trump's tariff policies. After he announced delaying the implementation of reciprocal tariffs by 90 days, the market expected Taiwan's exports to benefit, and foreign capital flooded in. But what's really interesting is the large-scale hedging of US dollar assets by Taiwan's life insurance industry, combined with corporate position unwinding, which was the main driver pushing the exchange rate to the extreme. At that time, the central bank was also caught in a dilemma, fearing that intervention would be labeled as currency manipulation by the U.S., so market sentiment became even more unstable.

From a technical perspective, UBS's report pointed out that the New Taiwan dollar had shifted from undervalued to overvalued, but the foreign exchange derivatives market showed the strongest appreciation expectations in five years. For short-term traders like me, that period was extremely volatile, but there were definitely opportunities. However, I think it's quite difficult for the Taiwan dollar to keep soaring to 28 NT dollars. The market consensus is that 28 is a very tough psychological barrier to break. The long-term fundamentals for a strong Taiwan dollar are still there (steady semiconductor exports, solid economic fundamentals), but in the short term, it will definitely fluctuate between 30 and 30.5 NT dollars. For friends interested in forex trading, I suggest testing with small amounts, setting stop-loss orders, and not getting scared by market volatility.