A note from MUFG says the Taiwanese dollar posted its largest single-day gain since at least 1983—possibly in its history—on Friday, May 2, soaring 3.8% in a single session and 5.5% over the week. The broader Asian FX complex also rallied, led by gains in the Korean won (+1.7%), Malaysian ringgit (+1.4%), Singapore dollar (+1%), Indonesian rupiah (+1%), and offshore Chinese yuan (+0.9%).
The Taiwan dollar’s daily move was described as a 19-standard-deviation event, underscoring its rarity.
Key drivers behind the surge included:
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Renewed hopes for U.S.-China trade talks, particularly surrounding tariffs, boosted regional sentiment.
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Strong U.S. tech earnings lifted risk appetite, benefiting tech-heavy economies like Taiwan.
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Robust Taiwanese GDP data and a sharp $1.2 billion in foreign equity inflows further supported the TWD.
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Domestic hedging pressures, as insurers adjust portfolios due to a weakening U.S. dollar and asset-liability mismatches, likely contributed.
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Holiday-thinned liquidity and a rush in exporter conversions may have exaggerated the moves.
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The Taiwanese government confirmed the first round of tariff consultations with the U.S. concluded on May 1, adding a layer of policy support.
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I think I’m not going too far out on a limb saying the move was driven by, and continues to be driven by, specuyaltiuon over revaluation pressures in light of Trump tariffs:
The surge for the TWD continued today:
I posted this chart earlier.
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For the stats folks:
A 19 standard deviation event is so rare under normal statistical assumptions that it is, for all practical purposes, impossible.
Here’s how the math works:
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In a normal (Gaussian) distribution, the probability of a 6 standard deviation event is about 1 in 500 million.
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A 10 standard deviation event? Less than 1 in 10²².
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A 19 standard deviation event is on the order of 1 in 10⁷⁹ — a number so astronomically small it’s effectively zero.
To put it in context:
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There are about 10⁷⁸ atoms in the observable universe.
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So a 19σ event would be expected to happen less than once in the age of the universe, even if you observed a new scenario every Planck time (~10⁻⁴⁴ seconds).
In short:
A 19σ move in markets is not statistically plausible under normal assumptions — it either reflects severe non-normality in market returns, model limitations, or the presence of one-off structural forces (like holiday illiquidity, capital controls, or policy shocks).
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And, for traders:
A 19σ move is basically off the charts — literally. In a normal distribution, even a 6-sigma event is a once-in-a-lifetime shock. A 19-sigma move? That’s like flipping a coin and landing heads 78 times in a row — it just doesn’t happen in clean statistical theory.
So when someone says the Taiwan dollar’s rally was a “19 standard deviation event,” they’re really saying:
This move was freakishly large, way beyond what models would ever price in.
In reality, this tells us the market wasn’t functioning “normally”:
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Liquidity was thin (due to holidays) … and as a ps. its always thin in TWD.
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Positioning was probably one-sided,
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Macro and flow catalysts lined up perfectly (U.S.-China tariff talks, strong Taiwan GDP, $1.2bn foreign inflows),
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And structural issues like hedging by Taiwanese insurers magnified the flow impact.
Bottom line:
This wasn’t a coin toss gone wild — it was a perfect storm of catalysts in a shallow market, and standard deviation stats just don’t capture that kind of real-world dynamics.
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