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ASIA FX: USD/CNH Ticks Lower Amid Equity Bounce, Won Underperforms Yen Gains

ASIA FX
BulletEM BulletAPACEmerging Market News

In North Asia FX, in Friday trade to date, USD/CNH sits down close to 0.20%. This is underperforming parts of the G10 complex, particularly the yen, which is up over 1%. The pair was last near 7.2345/50, while onshore spot was close by at 7.2315, up be around the same amount in yuan terms. 

  • Onshore equities are noticeably higher, with month end flows potentially helped, along with anticipation around tomorrow's official PMI prints. The CSI 300 is up +2% at the lunchtime break. The other headline that caught attention was that China Ministry of Finance would extend some tariff exemptions on US products to end Feb next year (they were due to expire tomorrow). See this BBG link.  
  • This would fit with China's playbook around trade tensions with the US in terms of not trying to escalate matters and waiting to see what the returning Trump administration delivers first.
  • USD/KRW spot has been very steady, last near 1394. We did get to 1397.45, before finding selling interest on broader USD softness. Still the won remains a notable underperformer. Local equities are off over 1.2% amid growth concerns after yesterday's surprise BoK rate cut. Today's Oct IP data didn't suggest any strong near term momentum.
  • The JPY/KRW cross is got close to 9.31 earlier (fresh highs since Sep), but sits back at 9.2900 in latest dealings. The firmer Tokyo CPI boosted yen. On this cross the RSI (14) is close to overbought territory, last near 67.55.
  • USD/TWD remains very steady, last in 32.50/55 range. 

 

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In North Asia FX, in Friday trade to date, USD/CNH sits down close to 0.20%. This is underperforming parts of the G10 complex, particularly the yen, which is up over 1%. The pair was last near 7.2345/50, while onshore spot was close by at 7.2315, up be around the same amount in yuan terms. 

  • Onshore equities are noticeably higher, with month end flows potentially helped, along with anticipation around tomorrow's official PMI prints. The CSI 300 is up +2% at the lunchtime break. The other headline that caught attention was that China Ministry of Finance would extend some tariff exemptions on US products to end Feb next year (they were due to expire tomorrow). See this BBG link.  
  • This would fit with China's playbook around trade tensions with the US in terms of not trying to escalate matters and waiting to see what the returning Trump administration delivers first.
  • USD/KRW spot has been very steady, last near 1394. We did get to 1397.45, before finding selling interest on broader USD softness. Still the won remains a notable underperformer. Local equities are off over 1.2% amid growth concerns after yesterday's surprise BoK rate cut. Today's Oct IP data didn't suggest any strong near term momentum.
  • The JPY/KRW cross is got close to 9.31 earlier (fresh highs since Sep), but sits back at 9.2900 in latest dealings. The firmer Tokyo CPI boosted yen. On this cross the RSI (14) is close to overbought territory, last near 67.55.
  • USD/TWD remains very steady, last in 32.50/55 range.