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ASIA FX: CNH and KRW Slip, Implied Vols Very High Ahead Of Next Week's Election

ASIA FX
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North East Asia FX is seeing CNH and KRW lose a little bit of ground. Both currencies remain within recent ranges though. TWD is marginally firmer. 

  • Early doors we have slightly disappointing South Korea trade data, which showed that export growth slowed more than expected (is now back negative y/y on a daily average basis). The PMI was unchanged and remained in contraction territory as well. Spot USD/KRW was last near 1380, around 0.20% weaker in won terms.
  • Implied vols continue to surge for both USD/KRW and USD/CNH. For the 1week tenor in South Korea we are back to early 2020 levels, while for CNH we are at fresh record highs (per BBG). Next week's election in the US will be a key driver of sentiment next week.
  • For spot USD/CNH we are back above 7.1300. The Caixin manufacturing PMI printed better than expected and is back above 50.0. This has aided China onshore equities, but the currency has seen little benefit.
  • Spot USD/TWD is slightly lower, last tracking underneath 32.00. While the pair remains within recent ranges, the generally more positive local growth backdrop may be helping sentiment at the margins. 
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North East Asia FX is seeing CNH and KRW lose a little bit of ground. Both currencies remain within recent ranges though. TWD is marginally firmer. 

  • Early doors we have slightly disappointing South Korea trade data, which showed that export growth slowed more than expected (is now back negative y/y on a daily average basis). The PMI was unchanged and remained in contraction territory as well. Spot USD/KRW was last near 1380, around 0.20% weaker in won terms.
  • Implied vols continue to surge for both USD/KRW and USD/CNH. For the 1week tenor in South Korea we are back to early 2020 levels, while for CNH we are at fresh record highs (per BBG). Next week's election in the US will be a key driver of sentiment next week.
  • For spot USD/CNH we are back above 7.1300. The Caixin manufacturing PMI printed better than expected and is back above 50.0. This has aided China onshore equities, but the currency has seen little benefit.
  • Spot USD/TWD is slightly lower, last tracking underneath 32.00. While the pair remains within recent ranges, the generally more positive local growth backdrop may be helping sentiment at the margins.