The Taiwan dollar came under fresh pressure on Thursday, falling to its weakest level since April 2025 as stronger US dollar momentum and seasonal dividend outflows weighed on investor sentiment. The currency dropped as much as 0.6% to 32.210 per US dollar, erasing the sharp gains from May last year, when the Taiwan dollar posted its strongest rally since the 1980s amid easing trade tensions and upbeat technology earnings.
Taiwan is now entering a sensitive period for currency markets, with domestic firms expected to distribute more than NT$2.5 trillion, or $77.7 billion, in cash dividends this year, the largest amount in Bloomberg-compiled data going back to 1990. Taiwan Semiconductor Manufacturing Co. NYSE:TSM, a major Taiwan-based semiconductor manufacturer, paid its quarterly dividend on Thursday, and Khoon Goh of Australia & New Zealand Banking Corp said dividend repatriation by foreign holders was likely weighing on the Taiwan dollar, with the currency potentially moving toward 32.5 per US dollar as more payouts arrive later this month.
The broader backdrop may keep investors cautious, as expectations for higher-for-longer US interest rates and a rebound in oil prices tied to renewed Middle East tensions have added pressure on the local currency. Traders said foreign investors remitted large sums overseas, while exporter and state-bank US dollar sales briefly reduced morning losses before heavier outflows drove the Taiwan dollar lower. Taiwan's central bank was also said to have asked local banks to process some large US dollar sell orders on the day received, while Governor Yang Chin-long told lawmakers that good exports and moderate inflation provide a solid foundation for Taiwan to handle a stronger US dollar.