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Taiwan dollar forecast to keep rising against greenback

2018/01/17 22:41:18

CNA file photo

Taipei, Jan. 17 (CNA) The Taiwan dollar is expected to continue its gains against the U.S. dollar in 2018 on the back of continued foreign fund inflows into the region and a growing regional economy, the Swiss banking group UBS said Wednesday.

While the U.S. dollar may strengthen in the short term on tax reform in the United States, the momentum of the U.S. dollar index is likely to fade later this year, boosting non-U.S. dollar currencies, including the Taiwan dollar, USB said.

At an investment conference in Taipei, Hyde Chen (陳彥甫), an equity analyst at UBS Wealth Management Chief Investment Office, said investors are likely to take more risks as the regional economy continues to grow.

Foreign investors are expected to move more funds into the region, taking advantage of the regional economic recovery, which will give the regional currencies room to rise against the U.S. dollar, Chen said.

In 2017, the Taiwan dollar rose 8.14 percent against the U.S. dollar, the largest growth since 1989, as foreign institutional investors registered a net fund inflow of about US$8.6 billion.

Since the beginning of the year, the Taiwan dollar has gained 0.96 percent against the U.S. dollar. Last Friday, the greenback ended at NT$29.560 against the Taiwan dollar.

While Chen declined to say how far the Taiwan dollar is likely to move in 2018, he said the local currency, along with the Thai Baht, the Singapore dollar, the Malaysian ringgit and other regional currencies, will climb against the U.S. dollar this year.

Given the continued foreign fund inflows, equity markets in the region are expected to extend their momentum from last year, Chen said, advising that investors put more funds into equities than bonds this year.

His outlook on the regional equity markets remains bullish in 2018, he said, mentioning in particular China, Indonesia and Thailand.

Meanwhile, UBS said it expects strong participation by female investors in the wealth management business in the region as the number of female billionaires has been growing.

In Taiwan, female investors account for 35 percent of UBS's total high-end wealth management customers, which is an indication of the importance of female clients in the local market, the bank said.

(By Tsai Yi-chu and Frances Huang)