Taiwan dollar set to post strongest weekly gain in a year

BENGALURU: The Taiwan dollar rose on Friday, ending the week at its highest level in a year, boosted by prospects of an easing in cross-strait tensions after the two China-friendly main opposition parties agreed to make a decision on a joint presidential ticket for January’s elections.

Other Asian stocks and currencies also received a boost from growing signs that the US Federal Reserve was done with interest rate hikes as data showed inflation was cooling down.

The Taiwan dollar gained 0.4% while equities jumped 0.3%, their second consecutive daily gain since the decision by the main opposition Kuomintang (KMT) and the Taiwan People’s Party (TPP), which have vowed to renew talks with China.

DBS analysts said that if these two Beijing-friendly opposition parties won next year’s elections, that could enable an easing of cross-straits relations in 2024.

“With the risk between China and Taiwan going forward, if KMT and TPP win the election next year, I think that will really support the Asian currencies as well,” Poon Panichpibool, markets strategist at Krung Thai Bank added.

Indonesia’s rupiah climbed 0.3% while most other currencies were largely flat. The Thai baht was heading towards its biggest weekly gain since March 17, while the Malaysian ringgit was on track for its third week of consecutive gains. The Taiwan dollar posted its strongest weekly gains in a year.

The MSCI Asia ex-Japan equity index is up 3.5% so far this week, its best week since July and third best of the year.

China’s yuan was steady and was set for its biggest weekly gain in two months after a meeting between the Chinese and US presidents eased concerns over geopolitical tensions and the risks these posed to Chinese assets.