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ASIA FX: Authorities Ramp Up Yuan Rhetoric But USD/CNH Dips Supported

ASIA FX
BulletEM BulletAPACEmerging Market News

There were lots support points around the yuan today. Onshore media stated the PBoC would keep the currency basically stable and has a number of tools to deal with depreciation. The CNY fixing bias remained firmly against depreciation pressures, while it was reported that bill issuance in Hong Kong will step up in January. USD/CNH saw lows of 7.3463, against earlier highs of 7.3647, but has been support on dips. We were last 7.3575, little changed for the session. 

  • The Caixin services PMI beat expectations, and while all of the PMIs are above the 50.0 expansion/contraction point, there was little positive follow through to the yuan or China equities. Spot USD/CNY is close to 7.3300, which isn't too far off the upper daily trading limit (+2% above today's fixing level of 7.1876).
  • Spot USD/KRW has been range bound, last near 1470. Earlier Dec FX reserves were steady. North Korean launched a ballistic missile to coincide with US Secretary of State Blinken's visit to South Korea, but asset market sentiment remained steady. South Korean stocks are higher, up nearly 2%, amid broader tech gains. This isn't aiding the won though.
  • Spot USD/TWD is little changed, last near 32.90. Early highs came in at 32.95, levels last seen in 2016. 

 

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There were lots support points around the yuan today. Onshore media stated the PBoC would keep the currency basically stable and has a number of tools to deal with depreciation. The CNY fixing bias remained firmly against depreciation pressures, while it was reported that bill issuance in Hong Kong will step up in January. USD/CNH saw lows of 7.3463, against earlier highs of 7.3647, but has been support on dips. We were last 7.3575, little changed for the session. 

  • The Caixin services PMI beat expectations, and while all of the PMIs are above the 50.0 expansion/contraction point, there was little positive follow through to the yuan or China equities. Spot USD/CNY is close to 7.3300, which isn't too far off the upper daily trading limit (+2% above today's fixing level of 7.1876).
  • Spot USD/KRW has been range bound, last near 1470. Earlier Dec FX reserves were steady. North Korean launched a ballistic missile to coincide with US Secretary of State Blinken's visit to South Korea, but asset market sentiment remained steady. South Korean stocks are higher, up nearly 2%, amid broader tech gains. This isn't aiding the won though.
  • Spot USD/TWD is little changed, last near 32.90. Early highs came in at 32.95, levels last seen in 2016.