Middle East Conflict Shows Signs of Easing; Expert Estimates New Taiwan Dollar to Stabilize Above 31 in Q2
With easing tensions in the Middle East and recovering global risk appetite, the New Taiwan Dollar is expected to appreciate in the second quarter, stabilizing around 31 against the US dollar. Experts cite improved geopolitical stability and the US Federal Reserve's dovish policy as key drivers, though significant breakthroughs may be challenging.
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- 📰 Published: April 18, 2026 at 11:45
- 🔍 Collected: April 18, 2026 at 12:01 (16 min after Published)
- 🤖 AI Analyzed: April 18, 2026 at 21:40 (9h 38m after Collected)
Signs of an easing conflict in the Middle East have emerged, leading to a recovery in global risk appetite and an influx of hot money, enabling the New Taiwan Dollar to finish the week on a strong note. Lin Qi-chao, Chief Economist at Cathay United Bank, believes that the turning point in Middle East tensions and the US Federal Reserve's continued dovish monetary policy are factors driving the NT dollar's rise. He estimates that the NT dollar should stabilize above 31 against the US dollar in the second quarter, although further breakthroughs may be difficult.
US President Trump stated that the next round of talks between the US and Iran could take place over the weekend, fueling optimistic expectations that the war with Iran may be nearing its end.
Since the beginning of this week, signs of an easing conflict in the Middle East have appeared, reducing risk aversion. Funds have flowed back into the stock market, and the US dollar index has fallen, leading to consecutive days of stock and currency gains in Taiwan.
Lin Qi-chao stated that the NT dollar has shaken off its depreciation trend this week, jumping from 31.7 to the 31.5 level. The key factor remains the easing of tensions in the Middle East, leading to capital returning to risk assets like the stock market. The dollar's decline from its highs and the NT dollar's appreciation are based on this factor.
Looking ahead to the NT dollar's exchange rate trend in the second quarter, Lin Qi-chao believes that as long as the impact of the Middle East conflict on the economy and inflation does not escalate further, monetary policy is expected to return to normal. In the second quarter, the NT dollar against the US dollar should shake off its depreciation gloom and stabilize above 31, but further breakthroughs may be difficult.
Lin Qi-chao forecasts that the NT dollar "will appreciate, but not by much" for two main reasons. First, if the Middle East conflict stabilizes and risk sentiment does not escalate further, the US Federal Reserve, while in a "wait-and-see" mode in the short term, is still moving towards interest rate cuts, prompting the dollar to fall from its highs. Second, Trump's unpredictable nature makes him difficult to forecast. Even if the Middle East conflict ends, tariffs and other uncertainties will persist. In other words, during Trump's term, risk aversion is unlikely to completely dissipate, making it difficult for the dollar to plummet.
On the other hand, Lin Qi-chao pointed out that various countries have reached trade agreements with the US regarding tariffs, which include large-scale investments. As these investment plans are launched, demand for dollars will increase, further supporting the dollar's exchange rate.
Lin Qi-chao stated that the extent of the NT dollar's appreciation depends on the decline of the US dollar index and the progress of the Federal Reserve's interest rate cuts, which in turn are related to the development of the Middle East conflict. The impact of the current war on the Eurozone has already begun to manifest; inflation in March was higher than expected, meaning the European Central Bank is likely to discuss interest rate hikes at its late April meeting. "It may not necessarily be a rate hike this time, but it will become an option."
Lin Qi-chao noted that if the Middle East conflict ends in April, its impact on the global economy and inflation will remain within controllable limits, and its effect on the monetary policies of major central banks may be limited. However, if the conflict drags on longer, it could evolve into a different scenario, requiring a wait-and-see approach and continuous attention. (Editor: Pan Yi-ching) 1150418
US President Trump stated that the next round of talks between the US and Iran could take place over the weekend, fueling optimistic expectations that the war with Iran may be nearing its end.
Since the beginning of this week, signs of an easing conflict in the Middle East have appeared, reducing risk aversion. Funds have flowed back into the stock market, and the US dollar index has fallen, leading to consecutive days of stock and currency gains in Taiwan.
Lin Qi-chao stated that the NT dollar has shaken off its depreciation trend this week, jumping from 31.7 to the 31.5 level. The key factor remains the easing of tensions in the Middle East, leading to capital returning to risk assets like the stock market. The dollar's decline from its highs and the NT dollar's appreciation are based on this factor.
Looking ahead to the NT dollar's exchange rate trend in the second quarter, Lin Qi-chao believes that as long as the impact of the Middle East conflict on the economy and inflation does not escalate further, monetary policy is expected to return to normal. In the second quarter, the NT dollar against the US dollar should shake off its depreciation gloom and stabilize above 31, but further breakthroughs may be difficult.
Lin Qi-chao forecasts that the NT dollar "will appreciate, but not by much" for two main reasons. First, if the Middle East conflict stabilizes and risk sentiment does not escalate further, the US Federal Reserve, while in a "wait-and-see" mode in the short term, is still moving towards interest rate cuts, prompting the dollar to fall from its highs. Second, Trump's unpredictable nature makes him difficult to forecast. Even if the Middle East conflict ends, tariffs and other uncertainties will persist. In other words, during Trump's term, risk aversion is unlikely to completely dissipate, making it difficult for the dollar to plummet.
On the other hand, Lin Qi-chao pointed out that various countries have reached trade agreements with the US regarding tariffs, which include large-scale investments. As these investment plans are launched, demand for dollars will increase, further supporting the dollar's exchange rate.
Lin Qi-chao stated that the extent of the NT dollar's appreciation depends on the decline of the US dollar index and the progress of the Federal Reserve's interest rate cuts, which in turn are related to the development of the Middle East conflict. The impact of the current war on the Eurozone has already begun to manifest; inflation in March was higher than expected, meaning the European Central Bank is likely to discuss interest rate hikes at its late April meeting. "It may not necessarily be a rate hike this time, but it will become an option."
Lin Qi-chao noted that if the Middle East conflict ends in April, its impact on the global economy and inflation will remain within controllable limits, and its effect on the monetary policies of major central banks may be limited. However, if the conflict drags on longer, it could evolve into a different scenario, requiring a wait-and-see approach and continuous attention. (Editor: Pan Yi-ching) 1150418