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ASIA FX: Won Outperforms Softer CNH & JPY Trends

ASIA FX
BulletEM BulletAPACEmerging Market News

USD/CNH has drifted a little higher in the first part of Wednesday trade, last near 7.2415. Onshore spot is close by, also above 7.2400, with this pair closer its recent highs (7.2470) relative to USD/CNH (7.2665). Tighter liquidity may aiding CNH at the margins. The PBoC sold yuan bills for 3 month and 1yr tenors in Hong Kong today. As expected the China LPR's were left unchanged. The PBOC fixing maintained a firm negative bias. 

  • Spot KRW has modestly outperformed the moves higher in both USD/JPY and USD/CNH so far today. Spot USD/KRW is back under 1390, up around 0.25% so far in won terms. We are close to testing downside support at the 20-day EMA (near 1388.5). Local equities are higher, but without offshore inflows (-$167.9mn sold so far by foreign investors). Earlier data showed a steady PPI at 1% y/y, while short term external debt rose to 37.8% of FX reserves, versus 34.4% in Q2. The IMF also nudged down BoK's GDP forecast for 2025, with downside risks.  
  • USD/TWD has firmed in the first part of Wednesday trade, last near 32.47. Earlier Nov highs remain intact at 32.61. Like most other USD/Asia pairs, USD/TWD remains above all key EMAs. Later on, we get Taiwan export orders for Oct. The market looks for a 3.8% y/y outcome, versus 4.6% prior.  The other focus point will be Nvidia's upcoming results, to gauge broader chip/tech related sentiment.
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USD/CNH has drifted a little higher in the first part of Wednesday trade, last near 7.2415. Onshore spot is close by, also above 7.2400, with this pair closer its recent highs (7.2470) relative to USD/CNH (7.2665). Tighter liquidity may aiding CNH at the margins. The PBoC sold yuan bills for 3 month and 1yr tenors in Hong Kong today. As expected the China LPR's were left unchanged. The PBOC fixing maintained a firm negative bias. 

  • Spot KRW has modestly outperformed the moves higher in both USD/JPY and USD/CNH so far today. Spot USD/KRW is back under 1390, up around 0.25% so far in won terms. We are close to testing downside support at the 20-day EMA (near 1388.5). Local equities are higher, but without offshore inflows (-$167.9mn sold so far by foreign investors). Earlier data showed a steady PPI at 1% y/y, while short term external debt rose to 37.8% of FX reserves, versus 34.4% in Q2. The IMF also nudged down BoK's GDP forecast for 2025, with downside risks.  
  • USD/TWD has firmed in the first part of Wednesday trade, last near 32.47. Earlier Nov highs remain intact at 32.61. Like most other USD/Asia pairs, USD/TWD remains above all key EMAs. Later on, we get Taiwan export orders for Oct. The market looks for a 3.8% y/y outcome, versus 4.6% prior.  The other focus point will be Nvidia's upcoming results, to gauge broader chip/tech related sentiment.