Liquidity Thin Due To Holidays

Several markets in Asia are closed for public holidays; Singapore, Indonesia, Thailand, Malaysia and India are all closed today.

• CNH: Offshore yuan strengthened, USD/CNH consolidating below 6.40 as the pair hit the lowest since June 2018. The PBOC fix was broadly in line with sell side estimates, despite the recent strength in the yuan, which markets interpreted as a signal the central bank if comfortable with the move higher in yuan. There was also a commentary in CSJ that predicted yuan strength near term.
• TWD: Taiwan dollar has continued its move higher on Wednesday, USD/TWD last down 0.061 at 27.80 the lowest since May 10. 1-month 25 delta risk reversals are hovering around 0.00 after being positive since March.
• KRW: Won is stronger, USD/KRW hovers just above its 100-DMA at 1116.71. Data earlier in the session showed manufacturers business confidence fell to 97 in June from 98 in May. Non-manufacturers confidence fell to 81 from 82 in May. Domestic demand would seem to have picked up, the proportion of companies complaining about weak demand fell to 11.7% from 11.8% previously. Markets await the BoK rate announcement tomorrow where the bank is expected to upgrade growth forecasts.
• PHP: Peso is stronger, OCTA Research Group said Tuesday advised that the gov't could gradually relax restrictions in Metro Manila, as the Covid-19 situation continued to improve.