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ASIA FX: CNH & KRW Away From Lows Amid Higher Onshore China Equities

ASIA FX
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For North East Asia currencies the USD is firmer, albeit against CNH and KRW, with TWD displaying some resilience. Focus has largely rested on China stimulus hopes, with positive onshore bourse gains helping push CNH and KRW from session lows. 

  • USD/CNH hoped higher and has tested above 7.0900 today, but sits back near 7.0830 in latest dealings. This is 0.20% weaker in CNH terms. Onshore equities have been volatile, but the CSI 300 sits up around 1.5% at the lunch break. The weekend MOF briefing was firm on rhetoric, particularly on reducing the local government debt burden and stabilizing housing, but the market was arguably looking for greater detail on the numbers. The USD/CNY fixing was close to neutral. We are still awaiting China Sep trade figures as well.
  • Spot USD/KRW got to fresh highs above 1359, levels last seen back in mid August, but we sit back near 1356 in latest dealings. This is still around 0.40% weaker versus end levels from last week. The Kospi is close to session highs, up nearly 0.90%. However, this hasn't helped KRW sentiment much.
  • Comments have crossed from BoK Governor Rhee, who stated the central bank will carefully consider the pace of rate cuts, due to financial stability concerns. This reiterates what the Governor stated on Friday after the BoK cut rates.
  • USD/TWD spot is down slightly outperforming the won and CNH. the pair was last at 32.16, so still close to recent highs. We have seen a better equity inflow backdrop for Taiwan relative to South Korea in recent weeks, which may helping TWD at the margins.  
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For North East Asia currencies the USD is firmer, albeit against CNH and KRW, with TWD displaying some resilience. Focus has largely rested on China stimulus hopes, with positive onshore bourse gains helping push CNH and KRW from session lows. 

  • USD/CNH hoped higher and has tested above 7.0900 today, but sits back near 7.0830 in latest dealings. This is 0.20% weaker in CNH terms. Onshore equities have been volatile, but the CSI 300 sits up around 1.5% at the lunch break. The weekend MOF briefing was firm on rhetoric, particularly on reducing the local government debt burden and stabilizing housing, but the market was arguably looking for greater detail on the numbers. The USD/CNY fixing was close to neutral. We are still awaiting China Sep trade figures as well.
  • Spot USD/KRW got to fresh highs above 1359, levels last seen back in mid August, but we sit back near 1356 in latest dealings. This is still around 0.40% weaker versus end levels from last week. The Kospi is close to session highs, up nearly 0.90%. However, this hasn't helped KRW sentiment much.
  • Comments have crossed from BoK Governor Rhee, who stated the central bank will carefully consider the pace of rate cuts, due to financial stability concerns. This reiterates what the Governor stated on Friday after the BoK cut rates.
  • USD/TWD spot is down slightly outperforming the won and CNH. the pair was last at 32.16, so still close to recent highs. We have seen a better equity inflow backdrop for Taiwan relative to South Korea in recent weeks, which may helping TWD at the margins.