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North East Asia Outperforms South East Asia Ahead Of US CPI Print


(MNI Australia) USD/Asia pairs have been mixed today. Currencies more sensitive to real UST yield shifts have generally underperformed, while those in North East Asia have seen greater resilience, despite equity headwinds. Tomorrow, Indian wholesale prices are due, along with South Korean trade prices.

  • USD/CNH has tracked familiar ranges, last just above 6.9800. The China currency is slightly firmer on mixed Covid developments. Easier restrictions in HK, including quarantine free travel with China in the new year is welcomed, but the current covid wave remains a source of concern in China.
  • 1 month USD/KRW has broken back sub 1300 this afternoon, despite an indifferent equity market lead. The won is around 0.50% stronger for the session to date. Higher beta FX is doing better in the G10 space, so some spill over is likely evident.
  • USD/INR is tracking higher, in line with other UST yield sensitive currencies today. The pair was last at 82.68, with December highs just a touch higher around 82.77. A break above these levels would have the market targeting the high 82.00/low 83.00 region, although this could draw RBI intervention risks. The last RBI policy meeting suggested the central bank was comfortable with the current state of FX markets and signalled a less interventionalist stance. Still, we would be surprised if the RBI stood aside completely and let USD/INR trade to fresh cyclical highs.
  • USD/IDR has pushed back into the upper end of recent ranges. We currently sit at 15668, +0.26% higher for the session. Highs in the pair from November came in around the 15750 level. Support still appears evident sub 15400, while the simple 50-day MA is just under 15570.Cross asset signals have been a headwind for IDR over recent sessions, with palm oil falling over 6% yesterday, although we have recouped around half these losses so far today. Still, the Citi Indonesia terms of trade proxy is off its recent highs.
  • USD/PHP is tracking higher again today, the pair up a further 0.30% to be last above 55.80. The pair dipped briefly below 55.20 during the start of last Friday's session, so this is somewhat of a turnaround. Resistance may be evident between 56.00 and 56.50 if seen, while on the downside note the simple 200-day MA comes in at 55.00. Better than expected trade figures did little to improve earlier.

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