The recent movement of the Taiwanese dollar has been really crazy. I've been watching the exchange rate lately, and in just a few trading days, it shot straight from 34 NT dollars to nearly 30 NT dollars, nearly a 10% increase. I’ve never seen anything like this in the past decade. I heard it's due to Trump's tariff policies, with the market starting to expect Taiwan will be asked to let the NT dollar appreciate, plus Taiwan's export data has been impressive, leading to a frenzy of foreign capital inflows.

However, what I’m a bit worried about is that the central bank now seems somewhat helpless. In the past, the central bank could always suppress the NT dollar’s appreciation, but now the U.S. Treasury is watching to see if countries are manipulating their exchange rates, making it a bit tricky for the central bank to intervene. Life insurance companies and exporters are also selling a lot of USD to buy the NT dollar to hedge risks, which further pushes up the NT dollar. UBS’s analysis says that behind this rally, there are many technical and sentiment factors amplifying the volatility.

So, will the US dollar fall? Based on the data I’ve seen, the chance of the NT dollar reaching 28 NT dollars is slim because once it approaches the central bank’s tolerance limit, they should step in to stabilize it. But from a valuation perspective, the NT dollar still has room to appreciate. The BIS real effective exchange rate index shows that the NT dollar is currently at a relatively reasonable and slightly undervalued level, less undervalued than the yen and Korean won. In the long run, the US dollar’s trend still depends on the Federal Reserve’s interest rate hikes, which are the key factors determining the exchange rate.

If you ask me whether the NT dollar will continue to appreciate, I think there will still be fluctuations in the short term, but the overall trend should be towards strength. In the longer term, the NT dollar might oscillate between 30 and 30.5 NT dollars, since Taiwan’s economic fundamentals are still solid, and semiconductor exports remain stable. If you want to try to catch this wave of exchange rate movements, I recommend starting with small amounts to test the waters—don’t go all-in at once. Some platforms offer demo accounts, so you can practice strategies before risking real money. Most importantly, set stop-loss orders, keep an eye on the central bank’s actions, and stay updated on the latest developments in US-Taiwan trade negotiations, as these will directly impact the market outlook.