The unexpected rise of the New Taiwan Dollar has continued this week, hitting NT$29 to US$1 in just fifteen minutes after the market opened. On Friday, the New Taiwan Dollar posted its largest single-day gain since 1983, rising 3.8% during the session.

According to Forexlive, the growth is being described as a 19-standard-deviation event, or 19-sigma move; for those unfamiliar with statistics, is like flipping a coin and having it land 78 times in a row which just does not happen in clean statistical theory.

The surge is most likely due to hopes for improved U.S.-Taiwan trade talks, stronger U.S. tech earnings which in-turn benefits tech-heavy Taiwan, and the weakening U.S. dollar, among other causes. In addition, liquidity is thin and structural issues such as hedging by Taiwanese insurers increased the rate of growth, creating a perfect combination of factors in a shallow market.

Unfortunately, Marbo Group CEO Wang Jung-hsu (王榮旭) details that when currency appreciation is too fast, manufacturers don't have time to hedge risks which will lead to losses. He pointed out that in the past, central banks would intervene in the market at the right time, but the current market is now looking at large exchange losses filled with pressure to sell US dollars. Wang said that in his long time in the financial industry, he has never seen a situation where the New Taiwan dollar appreciated by more than NT$2 in two days.