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ASIA FX: USD/CNH Tests Above 7.2700 Amid Tariff Threat, KRW Outperforms

ASIA FX
BulletEM BulletAPACEmerging Market News

Spot USD/CNH got too fresh multi month highs of 7.2728, as headlines crossed of Trump threatening a further 10% rise in tariff levels on China. This relates to drug flows, with Trump also threatening tariffs on imports from Mexico and Canada for the same issue and also related to migration flows. 

  • The pair sits lower now, last near 7.2630. USD/CNY spot is higher but found some selling interest above 7.2550. Markets may wait for clarification around the tariff issue, in terms of whether it applies on current tariffed imports from China or all imports from China.
  • Some offset for CNH has come from the slightly firmer onshore equity backdrop.
  • Spot USD/KRW is back under 1400, albeit remaining within recent ranges. We got to highs above 1407 on the tariff headlines, but support emerged when headlines crossed from the BoK and the National Pension Service around expanding their swap facility. The firmer yen track is also helping this afternoon. We were last under 1395, up around 0.40% for the session.
  • Spot USD/TWD is little changed, last near 32.47. 
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Spot USD/CNH got too fresh multi month highs of 7.2728, as headlines crossed of Trump threatening a further 10% rise in tariff levels on China. This relates to drug flows, with Trump also threatening tariffs on imports from Mexico and Canada for the same issue and also related to migration flows. 

  • The pair sits lower now, last near 7.2630. USD/CNY spot is higher but found some selling interest above 7.2550. Markets may wait for clarification around the tariff issue, in terms of whether it applies on current tariffed imports from China or all imports from China.
  • Some offset for CNH has come from the slightly firmer onshore equity backdrop.
  • Spot USD/KRW is back under 1400, albeit remaining within recent ranges. We got to highs above 1407 on the tariff headlines, but support emerged when headlines crossed from the BoK and the National Pension Service around expanding their swap facility. The firmer yen track is also helping this afternoon. We were last under 1395, up around 0.40% for the session.
  • Spot USD/TWD is little changed, last near 32.47.