CNH Losses Trimmed By Tighter Liquidity

USD/Asia pairs are mostly lower, albeit modestly. North East Asia FX has trailed though amid a slightly weaker yuan and early tech equity weakness (which has reversed somewhat as the session progressed). Gains in South East Asia FX have not gone beyond 0.25% at this stage though. Tomorrow, the data focus rests on Singapore May industrial production figures, with a quiet day ahead for other markets data wise.

• USD/CNH saw some volatility through the USD/CNY fixing result, from sub 7.2800 we rebounded towards 7.2850 before selling interest emerged. The fixing was set to fresh highs back to Nov last year, which went against market expectations of a lower outcome in USD/CNY terms. Helping limit CNH losses has been tighter CNH liquidity in Hong Kong, with CNH deposit rates rising. Onshore spot pushed above 7.2600 in early trade, but stopped short of the upper daily trading limit around 7.2650.
• 1 month USD/KRW is close to unchanged, last near 1384. Onshore equity sentiment has been stronger, bucking the negative tech lead from US markets in Monday trade. Earlier data showed improved consumer sentiment for June, while inflation expectations eased.
• Both spot USD/TWD and the 1 month NDF sit slightly higher, spot last above 32.40. Local equities are lower amid offshore tech headwinds. Yesterday saw strong net equity outflows from local markets.
• Elsewhere has seen softer USD trends, albeit within recent ranges. USD/MYR is back to 4.7070. The CPI print for May was slightly stronger than forecast at 2.0% y/y, versus 1.9% forecast and 1.8% prior.
• USD/THB is back to 36.60, around 0.25% stronger in baht terms of the session. USD/IDR was last near 16375, up a little 0.10% in IDR terms.