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CNH Underperforms, PHP, THB and HKD Higher

ASIA FX

USD/Asia pairs have tracked reasonably tight ranges, although there have been some pockets of strength. CNH is underperforming marginally, as the weaker CPI and softer equity backdrop weigh. PHP and THB are outperforming, while spot USD/HKD has fallen to fresh multi-month lows. Tomorrow, we have Indian IP growth, along with Hong Kong Q3 GDP revisions. Also note that China aggregate credit figures/new loans data is due between now and the 15th of November.

  • USD/CNH is close to session highs in recent dealings, last near 7.2900. We are well above yesterday's sub 7.2700 lows. The weaker CPI, which fell back into negative territory, arguably hasn't done monetary easing prospects any harm. Local equities have also struggled for positive traction, although are only down slightly.
  • 1 month USD/KRW has tracked recent ranges, last near 1306. Dips towards the 1300 level were supported, while moves above 1310 are drawing selling interest. Local equities are firmer from a Kospi standpoint, +0.65%, in line with gains in global tech shares.
  • Spot USD/HKD is tracking lower, last near 7.8100, which is fresh lows in the pair back to early August. The US-HK 3 month yield differential has fallen to fresh 3 month lows, near +7bps. The 3 month Hibor fix rose 6bps today. This comes as US front end yields have edged down from recent highs.
  • Spot USD/PHP is tracking lower, last under 55.90, around 0.25% stronger in PHP terms. Recent lows near 55.80 remain intact. Onshore equities are +0.40% higher (albeit away from highs), as Q3 GDP came out stronger than expected, +3.3% q/q growth, albeit with investment spending slowing.
  • USD/THB is lower as well, tracking under 35.50, but support evident ahead of 35.40, which is close to lows from the start of the week. Consumer sentiment rose further to 60.2 from 58.7. Onshore equities are down sharply, the SET off nearly 1.3% but this looks more company specific factors driven rather than broader macro headwinds. Weaker oil prices will likely be aiding PHP and THB are the margins.
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