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A Number Of USD/Asia Pairs At Multi-Year Highs, Regional Equity Sentiment Weaker

ASIA FX
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Most USD/Asia pairs have seen strong gains amid broad USD strength and slumping regional equity sentiment. The higher USD/CNY fixing was also a factor, although CNH losses remain modest amid tighter liquidity. Some pairs touched fresh highs going back a number of years. USD/KRW got to 1400, USD/TWD rallied through 32.5. USD/IDR is above 16100, while USD/PHP touched 57.00. A number of central banks/finance ministries were on the wires talking about curbing excessive volatility or stating they were intervening.

  • USD/CNH got to fresh highs of 7.2830 post the higher onshore fixing (back above 7.1000). However, we sit back sub 7.2700 in recent dealings, only around 0.155 weaker. Tighter liquidity is raising short CNH costs. USD/CNY spiked above 7.2400 at the open but reportedly met state bank offers. We were last back at 7.2375, little changed for the session. Q1 China GDP beat estimates, but the March activity figures point to a loss of momentum as we progressed through the quarter. Property related indicators also remain soft.
  • Spot USD/KRW touched a high of 1400, but we sit back lower at 1395/96 currently, still 0.80% weaker. The South Korean FinMin stated they are ready to curb excessive volatility in financial markets. The Kospi is down sharply, off more than 2%, as tech equities are weighed by higher US yields and Middle East tensions. The 1 month NDF was last near 1394.
  • Spot USD/TWD has broken higher, the pair above 32.50, levels last seen in 2016. Like the won, TWD is suffering from weaker tech sentiment and firm US yield backdrop.
  • Indonesian markets have returned from an extended break, with today the first trading session since Apr 5. Spot USD/IDR has surged, up over 2%, to be tracking around 16165 in recent dealings This is fresh highs in the pair back to Apr 2020. Note in March of that year the pair peaked at 16625. Rupiah weakness largely reflects catch up to USD gains/higher yields while onshore markets were shut. Not surprisingly, headlines have crossed with BI stating it has intervened in the spot and domestic NDF markets. It also plans to offer higher SRBI yields to attract offshore inflows (BBG).
  • USD/PHP tested 2023 highs at 57.00, but hasn't had a convincing breakthrough. BSP Governor Remolona was on the wires stating that 57.00 is not a firm line in the sand and that the central bank has changed its intervention strategy from previous years. He added tensions with China in the South China Sea are a PHP headwind.
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Most USD/Asia pairs have seen strong gains amid broad USD strength and slumping regional equity sentiment. The higher USD/CNY fixing was also a factor, although CNH losses remain modest amid tighter liquidity. Some pairs touched fresh highs going back a number of years. USD/KRW got to 1400, USD/TWD rallied through 32.5. USD/IDR is above 16100, while USD/PHP touched 57.00. A number of central banks/finance ministries were on the wires talking about curbing excessive volatility or stating they were intervening.

  • USD/CNH got to fresh highs of 7.2830 post the higher onshore fixing (back above 7.1000). However, we sit back sub 7.2700 in recent dealings, only around 0.155 weaker. Tighter liquidity is raising short CNH costs. USD/CNY spiked above 7.2400 at the open but reportedly met state bank offers. We were last back at 7.2375, little changed for the session. Q1 China GDP beat estimates, but the March activity figures point to a loss of momentum as we progressed through the quarter. Property related indicators also remain soft.
  • Spot USD/KRW touched a high of 1400, but we sit back lower at 1395/96 currently, still 0.80% weaker. The South Korean FinMin stated they are ready to curb excessive volatility in financial markets. The Kospi is down sharply, off more than 2%, as tech equities are weighed by higher US yields and Middle East tensions. The 1 month NDF was last near 1394.
  • Spot USD/TWD has broken higher, the pair above 32.50, levels last seen in 2016. Like the won, TWD is suffering from weaker tech sentiment and firm US yield backdrop.
  • Indonesian markets have returned from an extended break, with today the first trading session since Apr 5. Spot USD/IDR has surged, up over 2%, to be tracking around 16165 in recent dealings This is fresh highs in the pair back to Apr 2020. Note in March of that year the pair peaked at 16625. Rupiah weakness largely reflects catch up to USD gains/higher yields while onshore markets were shut. Not surprisingly, headlines have crossed with BI stating it has intervened in the spot and domestic NDF markets. It also plans to offer higher SRBI yields to attract offshore inflows (BBG).
  • USD/PHP tested 2023 highs at 57.00, but hasn't had a convincing breakthrough. BSP Governor Remolona was on the wires stating that 57.00 is not a firm line in the sand and that the central bank has changed its intervention strategy from previous years. He added tensions with China in the South China Sea are a PHP headwind.