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ASIA FX: USD/CNH Range Bound, KRW Softens On Surprise BoK Cut

ASIA FX
BulletEM BulletAPACEmerging Market News

USD/CNH is up slightly, but remains within recent ranges. We were last near 7.2520. Onshore equities have been pressured amid further reports of US chip curbs, but post the lunchtime break sentiment is a little better.  BBG note the chip curbs will potentially not be as bad as feared, although given the changing of the US administration soon, it may not impact sentiment much. Onshore spot is relatively steady, last near 7.2455. 

  • The USD/CNY fixing was set sub 7.1900 and saw a bigger fall than the consensus fixing estimate, hence the fixing error widened.  This suggests continued push back to yuan depreciation pressures despite a slightly softer USD tone.
  • The surprise BoK rate cut hit won sentiment, but there has been little follow through, and the pair remains sub 1400 at this stage. BoK Governor Rhee spoke a lot about FX volatility and the ability to manage it. He also added the swap agreement with NPS could be expanded. Hence moves beyond 1400 are likely to be managed to a degree.
  • Spot USD/TWD is very steady, last near 32.50/55, little changed for the session. Yesterday we had a further easing in the monitoring indicator (which is a growth indicator for Taiwan) to 32, from 34. It is still elevated historically though. 
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USD/CNH is up slightly, but remains within recent ranges. We were last near 7.2520. Onshore equities have been pressured amid further reports of US chip curbs, but post the lunchtime break sentiment is a little better.  BBG note the chip curbs will potentially not be as bad as feared, although given the changing of the US administration soon, it may not impact sentiment much. Onshore spot is relatively steady, last near 7.2455. 

  • The USD/CNY fixing was set sub 7.1900 and saw a bigger fall than the consensus fixing estimate, hence the fixing error widened.  This suggests continued push back to yuan depreciation pressures despite a slightly softer USD tone.
  • The surprise BoK rate cut hit won sentiment, but there has been little follow through, and the pair remains sub 1400 at this stage. BoK Governor Rhee spoke a lot about FX volatility and the ability to manage it. He also added the swap agreement with NPS could be expanded. Hence moves beyond 1400 are likely to be managed to a degree.
  • Spot USD/TWD is very steady, last near 32.50/55, little changed for the session. Yesterday we had a further easing in the monitoring indicator (which is a growth indicator for Taiwan) to 32, from 34. It is still elevated historically though.