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Divergent PMI Trends, But All USD/Asia Pairs Higher

ASIA FX

Today has delivered divergent PMI prints for Asian economies in August. Faltering outcomes are evident for South Korea and Taiwan, while China's Caixin PMI surprised on the downside. In South East Asia though, PMI trends were more resilient. USD/Asia pairs are still higher across the board, in line with USD gains against the majors.

  • CNH: USD/CNH has tracked within recent ranges, currently holding just under 6.9200. The CNY fixing was again much stronger than expected (-103pips relative to expectations), while the Caixin PMI slipped back into contractionary territory (49.5, versus 50.0 expected). Onshore equities are slightly higher though.
  • KRW: USD/KRW has pushed to fresh cyclical highs at 1355 (last 1353.5). Onshore equities have slumped, down -1.80%, while offshore investors have sold close to $400mn of local shares. Trade figures showed a record wide deficit, while the PMI fell deeper into contractionary territory (47.6).
  • TWD: USD/TWD has also risen to fresh highs, touching 30.50, fresh highs back to late 2019. Like Korea, onshore equities have fallen sharply, while the Taiwan PMI at 42.7 for August is nearly at 2020 lows. This, along with the South Korea PMI, are flashing a warning for the global trade outlook.
  • THB: USD/THB is up a further 0.77% today to 36.75. Late July highs close to 37.00 are within sight. Equity outflows were reasonably large yesterday, while the SET is off a further 0.7% today. The latest S&P Global M'fing PMI provided a sweetener, indicating that expansion quickened in Aug. Headline index rose to a fresh all-time high of 53.7 from 52.4 recorded in the prior month.
  • PHP: Spot USD/PHP last trades +0.27 at PHP56.43, with bulls looking for further gains towards record highs of PHP56.500. The Philippines' S&P Global M'fing PMI improved to 51.2 in Aug from 50.8 prior, albeit the authors of the survey warned that intensifying "downside risks to growth challenge the sector."
  • IDR: Spot USD/IDR has added 40 figs and last deals at IDR14,883. Familiar technical levels remain in play. Indonesia's S&P Global M'fing PMI rose to 51.7 in Aug from 51.3 prior amid "more pronounced growth in both output and total new orders." Headline CPI came in a touch softer than expected (4.69% YoY versus 4.87% expected), although core accelerated further to 3.04%.

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