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ASIA FX: CNH & KRW Lower, But Outperform Broader USD Gains

ASIA FX
GlobalEM BulletBulletAPACEmerging Market NewsRegion

USD/CNH has hit fresh multi month highs, despite another much stronger than expected CNY fixing outcome. We got close to 7.2600 but sit slightly lower now. CNH is off around 0.15% at this stage, so outperforming broader USD trends against the majors, with the yen off close to 0.35%. 

  • Late July highs in the pair were near 7.2760, which may be an upside target. It's clear though with the fixing bias that the authorities are trying to slow the pace of yuan depreciation. Next week we will also see yuan bills issues in Hong Kong, which may weigh on liquidity and make short CNH less appealing.
  • Spot USD/KRW has largely been range bound, albeit with slight upside bias. The pair was last near 1406. Onshore equities are higher away from best levels. The FinMin was on the wires stating that the authorities will take steps to stabilize FX markets if needed. Recent highs in USD/KRW at 1410.65 remain intact.
  • USD/TWD spot has pushed higher, rising nearly 0.40% to 32.55/60, fresh highs in the pair back to the first half of August. The CBC stated TWD has been rather stable though. Hence there doesn't appear to be a great deal of concern around recent weakness. Since the US election the TWD has lost close to 1.9%, around mid range from a EM Asia FX standpoint. 
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USD/CNH has hit fresh multi month highs, despite another much stronger than expected CNY fixing outcome. We got close to 7.2600 but sit slightly lower now. CNH is off around 0.15% at this stage, so outperforming broader USD trends against the majors, with the yen off close to 0.35%. 

  • Late July highs in the pair were near 7.2760, which may be an upside target. It's clear though with the fixing bias that the authorities are trying to slow the pace of yuan depreciation. Next week we will also see yuan bills issues in Hong Kong, which may weigh on liquidity and make short CNH less appealing.
  • Spot USD/KRW has largely been range bound, albeit with slight upside bias. The pair was last near 1406. Onshore equities are higher away from best levels. The FinMin was on the wires stating that the authorities will take steps to stabilize FX markets if needed. Recent highs in USD/KRW at 1410.65 remain intact.
  • USD/TWD spot has pushed higher, rising nearly 0.40% to 32.55/60, fresh highs in the pair back to the first half of August. The CBC stated TWD has been rather stable though. Hence there doesn't appear to be a great deal of concern around recent weakness. Since the US election the TWD has lost close to 1.9%, around mid range from a EM Asia FX standpoint.